Gov. Sam Brownback’s veto of tax legislation last week represents a “credit negative” to ratings agency Moody
As The Topeka Capital-Journal reports, Moody’s criticized Brownback’s veto of legislation aimed at reinstating income tax cuts saying in a statement: "With the state for now sticking with a lower-tax policy, Kansas will continue to struggle to balance its budget, consider deferring pension contributions again, and drain its highway fund of funding for crucial transportation projects."
Moody’s commentary constitutes a “credit negative” to the state, but the ratings agency didn’t change the state’s credit outlook or downgrade its rating. It did warn, however, that the state may be at risk in the future if nothing is done to resolve its budget issues.
House Bill 2178 would have raised personal income taxes, reinstated a third tax bracket and repealed a tax exemption for pass-through business income and raised more than a billion dollars over the next two years.
Moody’s rates Kansas Aa2, with a negative outlook. Another major ratings agency, S&P, rates Kansas AA-