State Treasurer Ken Miller said Monday a recent downgrade of the bond rating for Kansas should “serve as a wake-up call for us here.”
He said Oklahoma is on a more responsible fiscal track than Kansas, but some of the reasons Moody’s Investors Service slightly reduced the Kansas rating sound “eerily familiar” compared with practices or proposals in the Sooner State.
One of the reasons for the Kansas downgrade was using money from one-time revenue to cover operating expenses. There have been suggestions to tap Oklahoma’s Rainy Day Fund to help balance the state’s budget.
Another reason involved revenue reductions resulting from tax cuts. Oklahoma Gov. Mary Fallin has approved legislation to slightly reduce the state’s income tax rate in the future if state revenues increase.
Finally, an underfunded retirement system in Kansas figured into the rating reduction there. Oklahoma also has an underfunded retirement system.
Bond ratings are used to determine how much it costs a state to borrow money. A lower rating increases interest rates.
Miller said Kansas is enacting conservative ideology.
“But they are not being fiscally conservative, because fiscally conservative is paying your bills,” Miller said.
“I think our tax cuts have been much more responsible than Kansas,” he said. “They are facing a much lower receipt of income taxes than they thought that they would.