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Archive for Wednesday, February 18, 2009

State resumes issuing income tax refunds

Leaders’ agreement allows income-tax refunds to resume

February 18, 2009

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State funds are flowing again

State leaders approved moving $220 million into the state's main bank account from other accounts. Enlarge video

— Kansas resumed paying income tax refunds Wednesday after state officials averted a cash crunch that also had threatened to delay state workers’ next paychecks.

Democratic Gov. Kathleen Sebelius received the approval of Republican legislative leaders to move $225 million into the state’s main bank account from other funds around state government. Electronic transfers began within minutes, providing funds needed to pay bills on time.

GOP leaders, who control majorities in both the House and Senate, had blocked the internal borrowing, saying it was illegal because the state still projected a deficit in its budget for the fiscal year that ends June 30. On Tuesday, Sebelius signed a bill to eliminate the shortfall, and Republicans said they would consent to the borrowing.

It required a special certificate from the State Finance Council, which consists of the governor and eight top legislative leaders, six of whom are Republicans. The council’s vote Wednesday to issue a certificate was unanimous.

“It’s probably done right now,” Budget Director Duane Goossen said about 15 minutes after the meeting. “Everything is flowing.”

Sebelius and Goossen said they believe the state can avoid additional internal borrowing this fiscal year because of the federal stimulus legislation. The state expects to receive almost $1.7 billion, and Sebelius and Goossen said they expect $111 million worth of health care dollars to arrive after mid-April.

“It gives us a little more cushion than we would have,” Sebelius said. “The stimulus money in no way kind of gets us out of the woods. We have to move toward a structurally balanced budget.”

The state often faces a cash crunch in February and March, when bills come due but it is still waiting the collect most of its income tax revenues. When the economy is sour, it’s not uncommon for Kansas to resort to internal borrowing.

Goossen said the state had about $8 million in its main account Wednesday morning. It needed $56 million to cover pending income tax refunds, Friday’s payroll and weekly payments to doctors and clinics who provide services under the Medicaid program.

Sebelius convened a Finance Council meeting Monday, but Republican leaders told her they wouldn’t consent to the internal borrowing until the budget was balanced, and she called it off. Goossen said news reports about the impasse led credit rating agencies to call, worried that Kansas would be late in making bond payments, though no state official had suggested that possibility.

“We’ve always intended to pay our bills,” Sebelius said after the council’s meeting. “I’m just sorry that we had to sort of jeopardize the credit rating of Kansas, potentially, and have this high drama that was not necessary.”

But Republicans said Sebelius and Goossen created the unnecessary drama by suggesting the state might not pay its 42,000 employees on time.

GOP leaders said they simply wanted the administration to follow a law that requires the internal borrowing to be paid back by the end of the fiscal year. They said without a balanced budget, they weren’t sure the state could comply.

Sebelius and her staff disputed that. The council previously approved certificates in July and December, authorizing $550 million in internal borrowing.

Comments

juscin3 5 years, 2 months ago

Rumor I heard this morning while waiting to clock in at work, which is in Topeka, that Sebelius had the bill sitting on her desk for 5 hours before she even signed it.
I just started working for the state which is a temp. job, and I have to wait a whole month before I receive my first check. The gals that I work with were pretty upset yesterday because they didn't think they were goin to get their checks on Friday.
Another rumor was that they weren't going to be able to cash their check till Sat. I hope when I get paid, my check doesn't bounce!!! I'm thinkin that maybe Sebelius signed it because she is up for another job...hence the article that is "breaking news."

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Chris Ogle 5 years, 2 months ago

I owe.... guess they will have to wait..... I am having budget problems.

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edjayhawk 5 years, 2 months ago

My state refund is only a few dollars. Just donate mine...

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Brandon Devlin 5 years, 2 months ago

Yup, I concur. . .mine showed up this morning.

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darthvedder 5 years, 2 months ago

redfred,

That's good to know. I got a little ahead of myself. Although I'm neither owed a refund nor a state employee, I, not unlike a kneecapping loanshark, become a bit enraged when monies owed are threatened to be withheld.

And while I'm venting semi-anonymously on these here internets - why is the reporting on this so fuzzy? One would think a state story gone national (drudge, huffpo, et al.) may have some detail to it. Who, What, When (exactly), etc... When it comes to the processing of payments the differences between 'last week' and Friday Feb 13th at 1:36pm can make all the difference.

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Budgets_Smudgets 5 years, 2 months ago

darthvedder, Exactly.

But everybody's tiddies were knotted up enough to allow this non-crisis crisis to produce nearly a dozen articles in this newspaper alone. Everybody bought a ticket to watch the theater.

Meanwhile, Rome burns. The Fiscal Year 2010 budget is nowhere near completion, and the real rubber has yet to meet the road.

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redfred 5 years, 2 months ago

Darth - They started paying today. Had mine in the bank first thing this morning. They are not " waiting until Friday".

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maetl 5 years, 2 months ago

Well, maybe we won't have to clear out our prisons now, either.

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darthvedder 5 years, 2 months ago

When exactly did the state stop issuing tax refunds? What day? What time? Did anyone out there not get their tax refund?

I ask because this issue smacks of scare tactics. My guess is refunds were suspended late Friday of last week after all scheduled refunds for the week had been sent. And now they've somehow "resumed" paying them today, Wednesday, although they don't actually pay them again until this Friday.

They suspended nothing except possibly the processing, not payment, of the checks for two days (one of which was Presidents Day).

We were threatened with a withholding of refunds and paychecks in order to bring attention to idealogical differences. It's akin to hostage taking.

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