Moody's Investors Services revised the outlook of Kansas' issuer rating to negative from stable, the ratings agency announced on Tuesday, citing in part the underfunding of the state's pension plans.
The rating remains at Aa2, but Moody's said in a statement announcing the action that “the revision of the state's outlook to negative from stable reflects the ongoing difficulties it is having restoring structural balance to its budget and getting on a path to sounder funding of its pension liabilities.”
Kansas Gov. Sam Brownback's office announced early last month it would delay a $92.6 million contribution to the $16 billion Kansas Public Employees Retirement System, Topeka, that had been scheduled for April 15. As of Dec. 15, KPERS had a funding ratio of 67%.
“By continuing to balance its budget with unsustainable, non-recurring resources, including pension underfunding, it is accumulating large and expensive long-term liabilities that it will be paying off for a long time,” Moody's said in the statement.