...S&P Global Ratings has lowered its issuer credit rating (ICR) on the Commonwealth of Kentucky to 'A' from 'A+' due to increased budgetary strain from rising costs associated with pension obligations within a constrained revenue-raising environment. In our opinion, the state is more vulnerable to fiscal stress due to years of uneven budgetary management that has relied on expenditure cuts and weakened reserve levels during a period of economic expansion. The state's high level of fixed costs for its pension obligations and Medicaid are likely to remain such, further pressuring future budgets. Further complicating the state's long-term fiscal health are income levels well below the national average and economic growth that has consistently lagged the nation. At the same time, S&P Global Ratings lowered its rating on the state's linked appropriation-backed obligations to 'A-' from 'A', affecting issues on lease debt issued by the State Property and Buildings Commission (SPBC) and other state...
