Kansas Struggles to Recover from Years of Fiscal Volatility
For a number of years, Kansas legislators have been working to repair the state’s damaged credit rating. In 2016, S&P downgraded Kansas State’s rating from AA to AA-minus, a demotion for which many blame years of tax cuts under the previous governor, among other factors. A recent article from Bond Buyer takes a look at Governor Laura Kelly’s new budget proposal, as well as S&P’s take on it.
According to S&P calculations, Kansas faces a large—and growing—budget gap, measuring in the tens to hundreds of million dollars. Though this is a relatively moderate gap, it does indicate that the state continues to struggle fiscally.
Governor Kelly’s proposed fiscal 2020 budget includes a number of strategies for stabilizing the state’s fiscal health. One method put forward is the repayment of a $317.2 million loan five years ahead of schedule. Kelly also proposes increasing general-fund expenditures by drawing on revenue growth from 2017 tax increases, re-amortizing the state’s pension fund schedule, utilizing new revenue from economic growth, and decreasing the fund balance slightly.
Kansas has dealt with a lot of fiscal volatility in the last decade. While Governor Kelly is optimistic about her proposed budget, S&P is relatively more cautious.
For more details, read the article in full at Bond Buyer.