Kan. suspends income tax refunds, may miss payroll

[peternap]

http://www.kansas.com/735/story/701750.html

TOPEKA, Kan. - Kansas has suspended income tax refunds and may not be able to pay employees on time, the state's budget director said Monday.

The state doesn't have enough money in its main bank account to pay its bills, prompting Democratic Gov. Kathleen Sebelius to suggest transferring $225 million from other accounts throughout state government. But the move required approval from legislative leaders, and the GOP refused Monday.

Budget Director Duane Goossen said that without the money, he's not sure the state can meet its payroll. State employees are due to be paid again Friday.

Goossen said the state stopped processing income tax refunds last week.

GOP leaders are hoping to pressure Sebelius into signing a bill making $326 million in adjustments to the budget for the fiscal year that ends June 30.

Legislators approved that bill last week, but it has not reached her desk.

Goossen said the state might also have to delay payments to public schools and to doctors who provide care to Kansans under the Medicaid program.

The state has transferred funds before when it has been short of cash in its main bank account. Most recently, the state issued the special certificates required in July and December for transfers totaling $550 million.

Each certificate requires the approval of the State Finance Council, which consists of the governor and eight top legislative leaders.

The council was scheduled to meet at 1 p.m. Monday, but Goossen said Sebelius canceled the meeting because Republican leaders told her they would not authorize the internal borrowing.

Some Republicans question whether such borrowing would be legal. When the state issues a certificate, it must promise that the money can be paid back by the end of the fiscal year. But the state already is projected to have a deficit in the current budget.

The legislation approved last week is designed to fix that.

Goossen said Republicans told Sebelius they want her to sign that bill first. Senate Minority Leader Anthony Hensley, D-Topeka, called the tactic "blackmail."

Republican leaders planned a news conference to discuss what happened.

[tanya]

I read inthe seattle paper the state of WA is possibly facing a cash shortage too.  I wonder if it is a ploy to get the feds to cough up more dough.  After all they could let some "workers" go.  Our welfare office in this small town has 10 workers in there every day and only about one or two clients a week.  Yes the case loads are bigger than that but once they are approved for services they only have to renew every six months and that can be done via phone or interneet so I am not feeling to sorry for our state workers here.  I am sick of the administrations taking up 80-90 percent of the money and the people who are in need end up with 10-20 percent of the budget.  With a 20 billion dollar budget we should have the best damn social services inthe nation!!! we do not.  By the way the entire state budget is only 33 billion for everything except transportation, higher ed,k-12, corrections, medicaid etc. There is something pretty damn fishy going on.   

[muldoon]

I have been reading the news on Kansas most of the afternoon.  Seems to me the gist of it is some politics between the legislature and the governor.  However, the fact remains that some 47 states have budget shortfalls for 2009.  While Kansas may or may not have an immediate disaster on their hands (which depends on if they can raise they debt ceiling), the underlying question is this... 

If you have to go to a soup kitchen, do you want to be one of the first in line, or do you want to be at the end of the line? 

Yes, I do believe the situation to be that bad.  2009 is shaping up to be a hell of a year, (and were only in February).  Start your journals if you haven't already because we are watching history in real time.  This will be a year to remember. 

[peternap]

Well said Muldooon!

I thought I was one of the few that kept a journal and actually, every year is history in the making. This just looks like one that will prove to be a huge bar on the graph.

[StinkerBell]

We have to pay taxes this April 15th. We owe for 2008. Can I send a note saying I am suspending payment due to my personal budget issues?

[glenn kangiser]

Sent them a note of promissory note, Stink - like a Federal Reserve Note.