Moody’s Investor Service calls “credit positive” the vote by the Kansas Legislature to override Gov. Sam Brownback to approve a tax increase to reduce the budget shortfall.
“The decision is a significant step in the state utilizing its available economic resources to meet its obligations,” wrote Dan Seymour, vice president and senior analyst at Moody’s. “While Kansas must still contend with high unfunded pension liabilities and an unfavorable school funding court decision, these challenges are consistent with other highly rated states and within its ability to manage.”
Moody’s rates the State of Kansas as Aa2/negative outlook.
It downgraded the state to Aa2 in 2014 because of budget shortfalls, and last year added the “negative outlook” which means that the next change would be a further downgrade.