Today, S&P Global, a worldwide credit rating agency, and Moody’s Investors, which provides international financial research and well-known credit ratings, announced it has affirmed the credit rating for the State of Kansas – meaning that the state’s credit rating and debt outlook remain the same as when it was last rated in 2020.
“Though the credit ratings for Kansas remained the same, this is still positive news for the state’s budget and economic outlook – especially during a global pandemic,” Governor Laura Kelly said. “We remain cautiously optimistic that our efforts to strengthen our budget and our economy through pro-growth policies are paying off. My administration will continue to promote and maintain fiscal responsibility, strengthen our economy, and support Kansas businesses and families.”
Today, S&P affirmed Kansas’ credit rating as AA-, as well as the state’s stable outlook on its appropriation-secured debt. Moody’s affirmed Kansas’ credit rating of Aa2, as well as its outlook. In the reports, the agencies cited Kansas’ low unemployment rate, diverse economy, and budgetary flexibility contributed to the rating affirmation.
Since 2019, the Kelly Administration has secured more than $6 billion in new business dollars invested in the state of Kansas, creating over 27,000 new jobs. As a result of these successes, Kansas was awarded Area Development Magazine’s prestigious Gold Shovel award in 2021 and was named Site Selection Magazine’s Best Business Climate in the West North Central region of the United States.
Kansas also experienced a 7.3% growth in Gross Domestic Product in the first quarter of 2021, and is one of three top states reporting higher employment in rural communities than before the pandemic.
“A lot of work has gone into restoring stability to the State budget over the past three years,” Adam Proffitt, Director of the Budget for the State of Kansas, said. “Having our credit outlook affirmed as stable while we continue to maneuver through a global pandemic is a clear indicator that Kansas is on solid fiscal footing. Governor Kelly has been focused on putting budget tools back into the toolbox, and we will continue to ensure we are making prudent fiscal decisions as we build the budget in the coming years.”
Prior to Governor Kelly’s administration, the State of Kansas’ S&P credit rating and outlook was downgraded four times between 2014 and 2017, citing structural budget pressures caused by the failed Brownback/Colyer Tax Experiment. 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.
The State of Kansas’ Moody credit outlook was dropped from stable to negative in 2016, citing ongoing difficulties to restore structural balance to its budget and get on a path to sounder funding of its pension liabilities after the failed Brownback/Colyer Tax Experiment. The state was also downgraded by Moody from Aa1 to Aa2 in 2014 because of falling tax revenue, unfunded pension costs, and the possibility of high court-ordered spending on education.