A major rating agency on Tuesday downgraded Kansas’ credit rating for the second time in two years because of the state’s budget problems.
S&P Global Ratings dropped its rating for Kansas to AA-, from AA, three months after putting the state on a negative credit watch. S&P also dropped the state’s credit rating in August 2014.
Forty-one states now have a higher rating from S&P. Only three – Illinois, New Jersey and Kentucky – have worse ratings. The ratings agency cited the state’s lack of cash reserves, even after multiple rounds of budget adjustments over the past year.
“The downgrade reflects what we believe to be structural budget pressures,” S&P credit analyst David Hitchcock said in the agency’s statement.
Kansas has struggled to balance its budget since Republican Gov. Sam Brownback successfully pushed the GOP-dominated Legislature to cut personal income taxes in 2012 and 2013 in an effort to stimulate the state’s economy.