Mon July 15, 2013
State Officials Say Kansas Credit Strong Despite Recent Downgrade
State administration officials say they're confident that Kansas will retain a strong credit rating, despite a recent downgrade on bonds and concerns about the effect of state income tax cuts.
Moody's is downgrading nearly $200 million in outstanding debt in a Kansas Department of Commerce program called Investments in Major Projects and Comprehensive Training, or IMPACT.
IMPACT provided training to new workers or workers who would otherwise be displaced from their jobs. The bonds are repaid through income taxes collected on the workers who received the training.
The downgrade lowered the rating on the bonds with a negative outlook, meaning analysts at Moody's see the potential for increased risk based on state policies.
Gov. Sam Brownback's spokeswoman Eileen Hawley says the state's bond health is good. She pointed to recent ratings by both Moody's and Standard & Poor's.
House Minority Leader Paul Davis, however, says any increased cost to borrowing money is another example of why income tax cuts enacted in 2012 and 2013 were wrong.