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.
Moody’s says the rating could be upgraded if the state rebuilds its reserve balances and takes steps to address the pension obligations.