Feb 8 S&P Global Ratings revised the outlook on
Kansas' AA-minus credit rating to negative from stable on
Wednesday, citing weak economic trends and structural budget
The credit rating agency faulted the state for its
continuous use of one-time revenue measures to shore up
operational spending. For the upcoming biennial budget,
nonrecurring measures include a plan to sell bonds backed by
Kansas' share of a nationwide settlement with U.S. tobacco
companies, liquidation of a capital reserve, and pension
underfunding, S&P said.
"We believe the next two years will remain pressured and the
proposed budget does not adequately provide solutions to Kansas'
ongoing structural deficits," said S&P analyst Oladunni Ososami
in a statement.
She added Kansas has a one in three chance of a credit
rating downgrade in the next two years.
The Kansas budget is feeling the effects of action taken by
Governor Sam Brownback and the Republican-controlled legislature
in recent years to cut corporate and other income taxes to help
the state compete with bordering Missouri and other states for
business development and jobs.
On Monday, the Republican governor blasted a legislative
plan to hike income taxes.
The state has also been battling school districts in court
over adequate funding.
(Reporting by Karen Pierog in Chicago; Editing by Matthew