Not even Wall Street is buying what Gov. Brownback is selling; Moody’s has downgraded Kansas’ state bonds
Kansas Gov. Sam Brownback’s grand, hideous policy experiments in the State of Kansas – which include cutting spending on schools, libraries, the arts, welfare, local health departments – are anathema to those of us who believe that government has a functioning role in a civilized world. But surely “fiscal conservatives” love those policies, right? Uhhhmmmm…
A few weeks ago, Bloomberg Businessweek weighed in with an early verdict on Brownback’s economic policy: “not too good,” it wrote, based on a recent nonpartisan report from the Kansas Legislative Research Department that estimated the state’s general fund would have a $900 million shortfall by fiscal year 2019. But the KLRD is probably just another libtard think-tank in disguise. What about the big money in America? What does Wall Street think about Brownie’s economic vision?
Well, today arrives word that Moody’s Investor Service, one of Wall Street’s big three credit-rating agencies, has downgraded Kansas’ state bonds from Aa1 to Aa2. Here’s its explanation:
The downgrade reflects Kansas’ relatively sluggish recovery compared with its peers, the use of non-recurring measures to balance the budget, revenue reductions (resulting from tax cuts) which have not been fully offset by recurring spending cuts, and an underfunded retirement system for which the state is not making actually required contributions.
Gulp. Moody’s also downgraded Kansas’ highway bonds, based on its view that “Kansas Department of Transportation (KDOT) revenues are insufficiently insulated from state general operating needs for KDOT’s debt to achieve a rating higher than the state’s issuer rating.”
Full report here.
(H/T, LJW.)
