Moody’s Investors Service warned that a Gov. Sam Brownback tax increase veto was a “credit negative.” The service didn’t downgrade or change the state’s credit rating, however.
In a statement, the credit rating service said that using stop-gap measures that worsen the state’s structural problems could effect Kansas’ future credit worthiness. While several media outlets noted the Moody’s warning to the Sunflower State, few, if any mention that Kansas could resolve its structural budget problems with budget cuts or with tax increases or a combination of both. Tax increases aren’t the only way to improve the state’s credit rating.
Moody’s analysts were optimistic about the state’s future earlier this month. In early February, Moody’s Credit Outlook noted Kansas is doing a better job of predicting its revenues. The service called that a “credit positive.”
Though Moody’s continues to have a negative outlook on Sunflower State finances, analysts noted that the state spends more than it receives in taxes. The analyst didn’t suggest tax increases, but said the service may change Kansas’ credit rating when revenue aligns with state spending.
Details on Cutting Room Floor
The Topeka Capitol-Journal called the “credit negative” analysis a “warning shot,” as if that’s a rarely fired weapon. Moody’s also in 2013 and 2014 called “credit negative” the Kansas Supreme Court rulings for increased school funding. The investment service called Kansas tax reductions in 2012, “manageable.”
Media bias is obvious when reporters leave out information that doesn’t fit their lust for a tax increase.