For Immediate Release:
February 28, 2023
Contact:
Cassie Nichols
[email protected]
S&P Global Improves Kansas Credit Outlook Under Governor Kelly
~~Top Credit Rating Agency Cites Closing the Bank of KDOT, Contributions to KPERS, Balanced Budgets in Upgrade~~
NEW YORK – Today, S&P Global, a worldwide credit rating agency, announced it has improved its credit outlook for the State of Kansas to ‘positive’ from ‘stable,’ citing Governor Laura Kelly’s efforts to close the Bank of KDOT, balance the state budget, pay off KPERS debt, and achieve record-low unemployment rates. This increases the likelihood that within the next two years the agency will improve Kansas’ credit rating, which dropped during Governor Sam Brownback’s administration due to his failed tax experiment. S&P affirmed Kansas’ credit rating as AA-.
S&P also improved its credit outlook to ‘positive’ from ‘stable’ and affirmed its AA credit rating on the Kansas Department of Transportation’s highway revenue bonds outstanding.
“This is great news for Kansas’ budget and economic outlook, making it even more likely that our state will be seen as a smart investment,” Governor Laura Kelly said. “It is clear that we have put Kansas back on track by growing our economy and paying off debts. I will continue to promote fiscal responsibility and cut taxes for working families in a way that maintains a balanced budget.”
In its report, S&P cited Governor Kelly’s recommended budgets for fiscal years 2023 and 2024 as indicators of continued fiscal responsibility that could lead to a credit rating upgrade and warned against irresponsible tax plans that could lead to a credit rating downgrade.
“The upward revision in our outlook from stable to positive is a clear sign that our steadfast efforts to restore the state’s fiscal health are working,” said Budget Director and Acting Secretary of Administration Adam Proffitt. “S&P’s review points to healthy stabilization fund balances and consistent structural balances as strengths in our outlook, reinforcing the Governor’s position of looking across the horizon when building this year’s budget. With continued budget stability, Kansas will be poised to see a well-deserved credit rating upgrade in the near future.”
Prior to Governor Kelly’s administration, the State of Kansas’ S&P credit rating and outlook was downgraded four times between 2014 and 2017. The state’s credit rating was downgraded from AA+ to AA in August 2014, put on a negative credit watch in 2016, downgraded again to an AA- in the same year, and the outlook downgraded from ‘stable’ to ‘negative’ in 2017. S&P improved the state’s credit outlook from ‘negative’ to ‘stable’ in 2018 after lawmakers rolled back the Brownback tax experiment.
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