Credit agency says court decision could hurt school finances
JACKSON, Miss. (AP) — A credit rating agency is warning that Mississippi school districts could feel more financial pressure after the state Supreme Court’s decision that the Legislature isn’t obligated to fully fund a school budget formula.
Moody’s Investors Service said Thursday that the decision is “credit negative” for districts because it’s now more likely that lawmakers won’t allocate as much aid as the Mississippi Adequate Education Program formula calls for.
The credit rater says Mississippi school districts are challenged by high fixed costs and the possibility that required employer contributions to the state pension system may rise in the future.
However, Moody’s says the decision is a “credit positive” for state government itself because it removes the chance that a big one-time payout of past shortfalls or increased future spending will be required.