S&P: Kansas budget issues likely to persist after tax hike
A major financial rating agency says a structural imbalance in Kansas’ budget is “likely to persist” even after the state increased income taxes to help close projected shortfalls.
The report this week from S&P Global Ratings highlighted the state’s plans to continue diverting highway funds to other spending and to keep shorting contributions to public pensions. Those moves were crucial to balancing the state budget through June 2019, even with the tax increase expected to raise $1.2 billion in new revenue over two years.
“While the state has boosted ongoing revenues through income tax increases, appropriations also have increased, leading to the persistence of structural imbalance in the biennium,” S&P said in the overview of its report, dated Wednesday.
The S&P report came about a month after another major rating agency, Moody’s Investors Service, upgraded the state’s credit outlook to “stable” from “negative” in the wake of lawmakers enacting the tax increase over Republican Gov. Sam Brownback’s veto. S&P took no action on its negative credit outlook for Kansas.
Read more: http://cjonline.com/news/local/state-government/2017-07-07/sp-kansas-budget-issues-likely-persist-after-tax-hike