TOPEKA, Kan. (AP) — A restriction that the Kansas Legislature placed on the University of Kansas could affect the school's credit, a credit ratings agency says.

The Legislature placed a provision in the state budget that Gov. Sam Brownback approved last week that bars the university from spending beyond its approved school budget without lawmakers' permission, The Wichita Eagle reported ( ). The restrictions were put in place in 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.

"These restrictions are credit negative because they limit the university's flexibility to manage its budget on a real-time basis," Moody's Investor Services analyst Michael Osborn wrote this week.

Moody's hasn't changed the university's credit rating. It gave the university a negative outlook in December, citing its decision to finance large-scale construction through bonds.

The Legislature's action doesn't affect bondholder security, Osborn wrote, but "it highlights the importance and significance of the relationship between a state and its public universities."


Information from: The Wichita (Kan.) Eagle,