The Down Range Forum
Member Section => Down Range Cafe => Topic started by: warhawke on February 17, 2009, 03:22:53 AM
-
How this won't effect you Marshel'lette;
http://www.kansas.com/735/story/701750.html (http://www.kansas.com/735/story/701750.html)
Kan. suspends income tax refunds, may miss payroll
BY JEANNINE KORANDA
Eagle Topeka bureau
TOPEKA - Income tax refunds and state employee paychecks could be late after Republican leaders and the Democratic governor clashed Monday over how to solve a cash-flow problem.
Payments to Medicaid providers and schools also could be delayed.
"We are out of cash, in essence," state budget director Duane Goossen said.
The move places state taxpayers, workers and schoolchildren in the middle of a political battle over budget cuts.
Republicans, who hold majorities in both chambers, blocked Gov. Kathleen Sebelius’ proposal to borrow $225 million from healthy state funds to cover shortages in accounts used to meet the state’s payroll and issue tax refunds.
GOP leaders said they won’t approve the IOUs until Sebelius either cuts the current budget herself or signs the bill they passed last week slashing $326 million — including $32 million for education — to balance the budget.
Republican leaders said they had no choice, that by law the state can’t borrow any more money from itself.
Sebelius and Democrats disagree and accuse the GOP of playing politics with people’s paychecks.
"Through their refusal to act today, the Republican legislative leadership is jeopardizing our citizens' pocketbooks for no other reason than to play political games — games in which the only ones set to lose are Kansas families, workers and schools," Sebelius said in a written statement.
Replied House Speaker Mike O’Neal: "While we all can agree that these are trying times for Kansas families, seniors and business owners, the Kansas House of Representatives respectfully disagrees with breaking the law in order to gain political capital."
The Senate approved the budget-cutting bill Thursday, but the governor has yet to receive it. It is being proofread and could reach Sebelius as early as Tuesday.
Her spokeswoman has said she will carefully consider it. She could sign it, veto it or veto portions of it.
Lower tax revenues
Kansas’ cash-flow problem stems in part from the worsening recession and lower-than-expected tax revenue.
As a result, the state had only $10æmillion in its checking account Monday morning.
Most immediately, that means the state does not have $24 million to cover payroll for the state's 42,000 employees and about $20 million for payments to Medicaid providers such as doctors, hospitals and nursing homes, Goossen said. Usually the state processes the payments on Wednesday and sends the checks out Friday.
"State employees simply have no more to give. Paychecks shouldn’t be held hostage for political maneuvering," said Lisa Ochs, president of the Kansas Organization of State Employees.
Kansas taxpayers also are due about $12 million in income tax returns. The state stopped payments on the refunds Friday.
Washburn University political science professor Bob Beatty likened the impasse to the 1995 budget battle between President Clinton and U.S. House Speaker Newt Gingrich. That dispute prompted a shutdown of the federal government. He said Kansas legislative leaders are making a dangerous gamble.
"Gingrich went too far," Beatty said. "If you go too far, you lose."
Options for borrowing
The state will pay its bills — "in a lawful manner," said O’Neal, R-Hutchinson.
At issue is whether the state can borrow now from other state funds. Such loans — called certificates of indebtedness — have routinely been used in the past when the state runs short on cash.
The move is similar to a family shifting unused money from one banking account to another to temporarily cover an expense, then putting the money back into the original account later.
The state would borrow unused money from one state agency's fund to pay immediate expenses for another agency, then replenish the borrowed amount later. The money has to be paid back by June 30, when the budget year ends.
State leaders already have authorized $550æmillion in certificates this fiscal year — $300 million last summer and $250 million in December.
In December, Republican leaders worried the state wouldn’t have the money to pay itself back. That’s the concern now, they say.
They say that although the state has borrowed from itself before, it has never borrowed this much in one year.
The Kansas Finance Council — which includes Sebelius and six Republican leaders — must approve any certificates of indebtedness.
"We cannot issue more certificates if the funds will not materialize by the end of the year," O’Neal said in a statement. “Without the revised 2009 budget bill, there is no way that we can legally issue a certificate knowing full well that the money will not be available to retire the debt."
Legislative leaders contend that if Sebelius had made cuts to state programs in late 2008, then the state wouldn’t be facing this problem. She could still make cuts to programs, guaranteeing the money would be available at the end of the year, O’Neal said.
Goossen said even if the governor ordered the cuts, called allotments, it wouldn’t fix the current predicament.
“The problem today is we don’t have cash to pay our bills in a timely fashion," he said. "Allotments only allow the governor to hold spending back."
State Treasurer Dennis McKinney, a Democrat, said the legislative leaders' move put the state's reputation as a reliable bill payer, and its credit rating, at risk.
"This is taking a budget fight one step too far," McKinney said.
Other ripples
In addition to payroll spending, the tax refunds and Medicaid payments, payments to schools and cities could be affected eventually if the impasse continues.
The state is scheduled March 2 to pay $185 million to public schools and $25 million to cities and counties to offset money lost when the state abolished the machinery and equipment tax, Goossen said.
Diane Gjerstad, lobbyist for Wichita schools, said she didn’t expect the district to be harmed. She added that the situation pointed to why districts need to have their own contingency fund. "If the state is short, we want to be able to make our payroll," she said.
Andover schools would be able to pay employees for the near future, said district spokeswoman Keturah Austin.
"If the state didn’t make it on time in February, we have enough cash reserves for one month," she said.
-
California and now Kansas. It's not about the taxes....it's about the spending.
-
Are things starting to look like a depression yet?
-
We have a governor that supports illegals and the Chamber or Commerce owns most of the Rino Republicans, we will be a 3rd world state before long with all the illegals having jobs and Kansan will be out of work. House Speaker Pelosi, Senate Majority Leader Reid and the Obama White House were absolutely certain about one thing for the House/Senate negotiating committee on the Stimulus Bill: There was to be no special restriction to keep illegal aliens from getting new jobs created by the bill at a cost of $250,000 to $500,000 each.
-
Are things starting to look like a depression yet?
Way back in the mid 70's I had a teacher that pointed out the only difference between a recession and a depression was the spelling. His claim was that the choice of words was the financial sector's influence just like the Chamber of Commerce trying to influence bad weather forcasts prior to big weekends.
-
I wonder how long before other states begin to go broke. I am a state employee in Colorado, we have already given up a cost of living increase this year, any performance bonuses or incentive awards, are now facing forced furloughs, and in the position that I am in will most likely loose my housing allowance, which will be a hit of $500/month. I commute in a van pool 180 miles a day and that pool will also most likely go a way which means my expense to commute. That will entail a much reduced net income.
But the gas fields are shutting down, and no other real jobs here on Western Slope....and now we have a government which is endebting our grandkids....just great.
-
I wonder if one was self-employed and due a refund, if they could just use the IOU against their 2009 tax payments?
-
Just think, if the governments of California and Kansas have to shut down, the people of those states will finally be safe.
-
We have a governor that supports illegals and the Chamber or Commerce owns most of the Rino Republicans, we will be a 3rd world state before long with all the illegals having jobs and Kansan will be out of work. House Speaker Pelosi, Senate Majority Leader Reid and the Obama White House were absolutely certain about one thing for the House/Senate negotiating committee on the Stimulus Bill: There was to be no special restriction to keep illegal aliens from getting new jobs created by the bill at a cost of $250,000 to $500,000 each.
I understand Kansas got a flood of illegals when Oklahoma passed that law that makes it a felony to hire an illegal.
-
Could there possibly be a more effective way to screw the state's retailers? Many people use their tax refunds to purchase larger ticket items like furniture, appliances, electronics, etc. Those sales upon which the merchants depend each spring are now gone this year.
I wonder how many small businesses, already teetering on the brink in the current economy, will end up as empty storefronts because of this move.
-
Yes Kansas had a flood of illegals since Ok and Mo both passed tough laws to counter illegals, Kansas just made a deal with the Governor and she had to sign a bill that cut cost instead of spending like Liberal Democaps