While political pundits review Georgia’s elections outcomes, Wall Street analysts have focused on the passage of an amendment to the Georgia Constitution that’s the first of its kind in the nation.

Moody’s Investors Services issued a report Friday that raises a cautionary flag over the amendment that caps Georgia’s individual income tax rate at 6 percent. The cap limits the state’s ability to raise revenues, if necessary, the report observes.

Georgia was one of 11 states included in a report intended to inform investors about ballot initiatives that could have a “material credit impact.”

Moody’s report does not suggest the credit rating agency will take any action to alter the state’s credit rating, which is the highest rating available. In addition, the report highlights Georgia’s historically fiscal conservative budget policies.

The concern Moody’s cited in Georgia involves the fact that personal income tax is the state’s largest source of revenue.

By setting a constitutional limit on the tax rate for the largest potential source of revenue, Georgia has removed one tool that could be used to raise funds as needed.

That, of course, was the intent of sponsors at the state Capitol when they passed Senate Resolution 415. Senate President Pro Tem David Shafer (R-Duluth) was the lead sponsor. Gov. Nathan Deal signed the bill into law on April 22.

Advocates contended the cap would improve Georgia’s competitiveness. According to Sen. Buddy Carter (R-Pooler), as quoted in ballotpedia.org:

• “Although somewhat symbolic, capping the rate at this level would improve Georgia’s competitiveness while bringing certainty to businesses contemplating expansion decisions in our state.”

Georgia voters supported the amendment by voting for it Tuesday by a three-to-one margin, according to unofficial elections returns.

Moody’s report observes that individual income tax accounted for 47 percent of the state’s current budget – generating $9.5 billion of the state’s $19.7 billion general fund budget, according to Moody’s.

The great recession showed the state’s vulnerability to any significant drops in personal income. State revenues plummeted during the recession, tracking the drop in wages and other income of Georgia residents.

Georgia has taken five years to reach the pre-recession level of income tax collections, following drops of 11 percent in Fiscal Year 2009 and 10 percent in FY 2010, according to the report.

The report observes:

• “A significant strength of state management lies in its broad powers and resources to manage its finances in the face of volatility. Georgia’s constitutional cap has stripped the state of that option with respect to its personal income tax. While it is not uncommon for a state to enact tax reform, Georgia will be the first to put a constitutional cap on its tax rate.”

The report goes on to outline the outcome in states that also have cut tax rates – though not through constitution amendments:

• “While we do not view tax policy changes as negative, we have seen recent examples of tax cuts resulting in lower-than-expected revenue performance, which can be a credit challenge. North Carolina  (Aaa stable) reduced its income tax rate from a tiered 6 percent, 7percent and 7.5 percent to a flat tax rate of 5.8 percent and experienced a year-over-year decline of 6.2 percent in individual income tax revenues during fiscal 2014, while Kansas (Aa2 stable) experienced a year-over-year decline of 32 percent in fiscal 2014 after cutting income tax rates.”

The report notes that Georgia’s 6 percent income tax rate is “average,” compared to neighboring states: South Carolina’s rate is 7 percent; Alabama’s rate is 5 percent; Florida does not levy an income tax; and Tennessee taxes only capital gains.