Gov. Kathleen Sebelius suspended income tax refunds last week, and if she doesn’t sign the Legislature’s 2009 budget bill, the state may not be able to pay its employees this week, including the faculty and staff at Emporia State University.
With no budget in place and with only $10 million in its bank account, the state can’t cover the $56 million it needs to make payroll, Medicaid payments and tax refunds.
Last week, Sebelius called a meeting of the State Finance Council to issue a certificate of indebtedness for funds to cover costs until the end of the fiscal year. On Monday, Republican leadership refused to consider the certificates because the state will not have enough money to repay the debt.
Sebelius accused Republicans of playing politics, but Republicans maintain it’s illegal under state law to issue debt when facing budget deficits.
“This is a matter of law,” Sen. Jim Barnett, R-Emporia, said on today. “The laws require that the state have enough money available to repay certificates of indebtedness before they can be issued. ... It would be a terrible precedent to set to begin issuing debt that the state cannot repay.”
The state already has issued two certificates of indebtedness this fiscal year, each for $225 million. Sebelius called the finance council meeting to consider an additional $225 million.
“That would be the largest amount in the history of our state,” Barnett said, “and it is doubtful that the state can repay those funds unless she signs Senate Bill 23.”
Senate Bill 23, which is intended to eliminate the state’s budget shortfall, will go to the governor’s desk today. Sebelius has not indicated whether she will sign the bill or not.
“The options are clear,” Barnett said. “The governor can sign Senate Bill 23, or she can issue allotments, or cuts to the budget, in order for the budget to balance, or she can line-item veto parts of the bill and yet allow adequate funds for the certificates of indebtedness to be issued.”
The lack of a budget could mean no paycheck this week for state employees. Employees at ESU are due to be paid on Friday.
“It affects each one of the people who works here,” Emporia State University President Michael Lane said. “Our concerns are for them because many of them live paycheck to paycheck, but I think it’s important to note that there’s plenty of time for the governor and the Legislature to resolve this before payday.”
The payroll for ESU is about $1.2 million, according to Ray Hauke, vice president for administration and fiscal affairs, and the school has never missed a payday yet.
“We’re in uncharted territory,” Hauke said. “This hasn’t happened.”
Lane expressed frustration at the political maneuvering over the state’s budget issues.
“I’m always disappointed when I see people held hostage over political issues,” Lane said, “but that’s the reality of participating in state government.”
Barnett said years of the state spending more money than it had has led to this crisis.
“The state is really on the brink of being insolvent,” Barnett said.
Meanwhile, the Legislature and Sebelius continue to trade barbs over the budget issues.
“(The governor’s) options do not include illegally issuing certificates of indebtedness when revenues, in this climate, cannot begin to repay the debt,” House Republican leaders said in a statement. “She can easily sign House Substitute for SB 23 or fix the problem by issuing allotments.”
State Treasurer Dennis McKinney said the Legislature, by refusing to consider issuing money to shore up the general fund, is acting irresponsibly.
“This is taking a budget fight one step too far,” McKinney said in a statement. “Through inaction, legislative leaders have put in jeopardy the state’s ability to make payments for payroll, public schools, health care and income tax refunds.”
For now, legislators and state employees are waiting to see whether Sebelius will sign the budget bill.
“Something has to be done in order for the state to legally issue those certificates of indebtedness,” Barnett said. “I would encourage Kansans to call the governor’s office and ask her to sign Senate Bill 23 today.”
goodoleboy (anonymous) says...
I think what sickens me most about this whole situation is that it has come this far with inaction on BOTH sides. I don't agree at all with the tactics being used to get the governor to sign this bill, but I don't agree either that letting it get to this point was the right course of action either, why are we just now hearing about this? And the question I have seen addressed nowhere which really vexes me is how they can forecast all of this without factoring in stimulus aid?
February 17, 2009 at 2:59 p.m. ( permalink | suggest removal )
shadou (anonymous) says...
I wonder, who got us in all of the economic mess anyway? Just who is responsible for how and how much money is spent in Kansas by our government? Are we like the federal government whose money is raised and spent by the House of Representatives?
If that is the case, why do we keep re-electing the same old losers? Our Legislature hasn't really managed to do much but squabble with the Governor for the past 8 years, that is when they aren't busy passing beer keg registration law and wrangling over how to manage to poison us with some more coal dust.
I suppose the reason we are broke devolves down to us, right? We have brought it on ourselves!
February 17, 2009 at 5:55 p.m. ( permalink | suggest removal )
hottopics (anonymous) says...
In this day and age, with this economy, which just didn't go 'poof' overnight they should have been picking and choosing their battles more carefully and take on the big dogs where needed and leave the minor issues for another day.
But the hard question is....Where do we go from here? We cant pay more taxes! We cant live on what they already take from what we barely make. God help us all...or cant I say that either??
February 17, 2009 at 9:03 p.m. ( permalink | suggest removal )
open_eyes (anonymous) says...
Henry Morgenthau Jr. was FDR's treasury secretary during his entire presidencey. On May 9, 1939 , testifying to the House Ways and Means committee, he said this: "We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I'm wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this administration we have just as much unemployment as when we started ... And an enormous debt to boot."
February 17, 2009 at 11:05 p.m. ( permalink | suggest removal )