Budget restrictions to Kansas University could hurt credit

TOPEKA, Kan. (AP) — A credit rating agency says a restriction that lawmakers placed on the University of Kansas could affect the university’s credit.

The Legislature placed a provision in the budget, signed by Gov. Sam Brownback last week, restricting the university from spending beyond its approved budget without permission from lawmakers. The Wichita Eagle reports the measure was a response to the university’s decision to go out of state for a $327 million bond issue in January to avoid the need for legislative approval.

Moody’s Investor Services said this week that the restrictions limit “the university’s flexibility to manage its budget on a real-time basis.”

Moody’s has not changed the university’s credit rating. Moody’s gave the university a negative outlook in December, citing its decision to finance large-scale construction through bonds.

 

Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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