TOPEKA, Kan. (AP) _ Moody's Investor Services is reducing the bond rating for the state of Kansas over concerns about the state's sluggish economic recovery compared with other states and issues with long-term financial obligations.
The service announced Wednesday that the rating was cut from Aa1 to Aa2. The decision was made the same day Kansas officials announced April revenue collections were $92 million less than previous forecasts.
Moody's cites the 2012 enactment of income tax cuts and the effect on state revenues as a factor in the downgrade, as well as long-term pension obligations and use of one-time sources of revenue to cover operations.
“For the second time since Governor Brownback took office, Kansas' credit rating has been downgraded," said Kansas House Minority Leader Paul Davis after the announcement. Davis is challenging Brownback for the governor's seat this fall.
"Because of Sam Brownback's experiment, our economy is not able to recover. This experiment is harming our ability to support our schools, grow our economy and invest in our state's future,” he continued.
Moody's says the rating could be upgraded if the state rebuilds its reserve balances and takes steps to address the pension obligations.
Posted by Greg Palmer