(Image via Saul Griffith, blogging about bond risk at forexabode.com)
Kansas Governor Sam Brownback and other Republicans
held a short rally in Topeka to celebrate their Tuesday night primary victories. But yesterday's (WED) celebration was clouded by news that yet another agency had downgraded the state's creditworthiness. KPR's J. Schafer reports.
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(longer version)
KS Credit Downgrade Dampens GOP Victory Party
Fresh off his election night victory, Kansas Governor Sam Brownback rallied his supporters during a brief celebration in Topeka. But yesterday's (WED) gathering of Republican primary winners ended with reporters asking the governor some tough questions about the latest news from S&P, or Standard and Poor's. The credit rating agency announced Wednesday that it had lowered the state's bond rating. KPR's J. Schafer has more.
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TOPEKA, Kan. (AP) — A second leading bond-rating agency has downgraded its credit rating for Kansas and cited what it calls the state's "structurally unbalanced budget" following massive personal income tax cuts. Standard & Poor's said Wednesday that it is dropping its rating for Kansas to AA from AA+. The agency also dropped its rating for bonds backed by state tax dollars. Moody's Investor Services downgraded its credit rating for Kansas in May. S&P said in its report that Kansas will probably need to cut spending in the future to offset the income tax cuts. The reductions were enacted that the urging of Republican Governor Sam Brownback to stimulate the economy. Brownback noted that the state's rating remains high and said rating agencies don't like tax cuts.