A recent report on Missouri’s credit prospects has jangled the nerves of state lawmakers and contributed to unease over the governor’s proposed expansion of the state’s Medicaid program.
Last week, Moody’s Investors Services assigned a negative outlook to Missouri’s credit rating because of the state’s financial ties to the federal government. The concern is that a downgrade of the federal government’s credit rating could pull the state’s pristine AAA rating down with it. The report noted that Missouri devotes 35 percent of its budget to Medicaid, a program co-funded by the federal and state governments.
Now Republican members of the Senate Appropriations Committee are voicing anxiety that Gov. Jay Nixon’s proposed Medicaid expansion, which would add 260,000 lower-income adults to the program and add $1.4 billion to the state’s budget, could further threaten the state’s credit rating and increase borrowing costs.