When it rains, it pours on poor Sam Brownback.
Kansas’s credit rating was reduced by Standard & Poor’s, which cited the effects of income-tax cuts endorsed by Republican Governor Sam Brownback that weren’t matched by less spending.Kansas Republicans have announced they have their plan though.. and as you may guess, it has nothing at all to do with raising revenues or growing the economy.
The rating fell to AA, third-highest, from AA+ and the state’s appropriation-secured debt was dropped to AA- from AA, S&P said today. The outlook on both ratings is negative.
“The negative outlook reflects our belief that there will be additional budget pressure as income tax cuts scheduled in future years go into effect, or if midyear revenue shortfalls resume,” credit analyst David Hitchcock said.
Kansas Watchdog and others began to point out that there would be "political spin" on this issue, and the spin was wrong. They directly referred to this Kansas City Star article:
Which notes many of these same concerns were raised by Moodys who doubted the ability of Kansas to cut more spending.
Analysts projected that the state could burn through its reserves this fiscal year, putting more pressure on lawmakers to cut the budget.With that in mind, what do the conservatives propose?
In May, Moody’s Investors Service cited similar concerns when it reduced the state’s bond rating one level because of mounting financial pressure on the Kansas state budget, partly because of the income tax cuts.
But Moody’s warned that cutting spending might not be easy given the court-ordered spending on schools, keeping up with Medicaid demands and funding pensions.
Dave Trabert, president of the conservative Kansas Policy Institute, said the downgrade reinforces his arguments that the Sunflower State needs to get its fiscal house in order.For a state recently excoriated over the handling of education budgets, lack of funding to KDOT (Transportation) and a state falling behind on infrastructure spending, I wonder where the spending cuts will come from?
“We have to get away from this notion that cutting spending is reducing services,” Trabert told Kansas Watchdog. “You go and ask a reasonable sample of citizens ‘does government operate efficiently,’ and they’ll probably tell you in a lot of different ways ‘absolutely not.’”
Hitchcock wrote that should Kansas enact spending reductions to facilitate a more structurally sound budget in FY2016, “we could revise the outlook to stable.”
The Kansas Conservative Budget group offers no real direct answers. Just generic 'there is room to cut'. They do so because they know if they actually come out and say they must betray education, community services or long term debt servicing people will immediately understand something really wrong happened here.