Archive for Saturday, May 30, 2009

State halts tax refunds, ed payments

May 30, 2009


— Kansas has temporarily stopped income tax refunds and plans to delay payments to its public schools because of a revenue shortfall this month.

Preliminary figures Friday from the Department of Revenue said the state collected $103 million less in tax revenues than anticipated in May. The state appears headed toward a deficit of about $30 million when its 2009 fiscal year ends June 30.

Anticipating the shortfall, the department suspended income tax refunds Tuesday and expects 22,000 refunds, worth about $11 million, to be affected. Spokeswoman Freda Warfield said the department expects the refunds to be held up a few weeks.

Delayed compensation

State Budget Director Duane Goossen said the state is supposed to provide $130 million to school districts Monday to finance their special education programs but will delay the payments for a few weeks. He said it also could delay an additional $52 million in education funding payments due later in June.

Lawrence schools Superintendent Randy Weseman said the delay in payments from the state will require the district to dip into its reserve funds to offset the $400,000 state payment it was expecting.

“There’s no immediate impact because we can cover that for the short term,” Weseman said.

Such actions are designed to buy officials time to find ways to reduce spending in state government. Gov. Mark Parkinson said Thursday night that he is likely to trim the $13 billion budget approved for fiscal 2010 to keep the state from running a deficit.

“Immediately, what we’re trying to do now is get out of fiscal year 2009 in a reasonable and prudent way,” Goossen said Friday.

School districts and other state agencies would likely have to endure further cuts in coming months. The Lawrence school board has already voted to cut hundreds of thousands of dollars from its budget, including eliminating bus service for students who live less than 2.5 miles from their schools.

“This isn’t the end of the cutting. In my mind, it’s just going to continue. The cutting will continue. The level will be determined by people who run the state,” Weseman said.

The state already has had three rounds of budget cuts this year, as the national economic slump has caused revenues to fall short of expectations. Last week, Parkinson signed a bill trimming $138 million from spending previously approved for fiscal 2010.

That budget had appeared to be balanced. But even if revenues met expectations, the state would be left with only $17,000 in cash reserves at the end of fiscal 2010, meaning no cushion if revenues dipped.

“There will be a lot of pressure on him to make allotments pretty quick,” said House Appropriations Committee Chairman Kevin Yoder, an Overland Park Republican. “The quicker he makes them, the easier it gets for state agencies and schools.”

Top Parkinson aides said cuts would occur after the new fiscal year starts in July. Parkinson also has promised to consult legislative leaders and other state officials.

But word that May’s revenue figures would look bad cast a pall over an already gloomy meeting Friday of the state’s top social services official with dozens of advocates for the needy.

More planned cuts

Secretary Don Jordan outlined $44 million in cuts that the Department of Social and Rehabilitation Services plans to make to stay within its fiscal 2010 budget.

The agency expects to reduce foster care services, grants to community mental health centers and cash assistance to the disabled. It plans to eliminate some state aid to groups serving the developmentally disabled, and Jordan said the department is keeping 30 percent of its central office jobs and 14 percent of its state hospital positions open.

“We’ll probably be going deeper every other time we work on the budget in the near future,” he said. “I really do expect that this is not the end of the cuts.”

House Republican leaders on Friday criticized the 2010 budget Parkinson passed with support of Democrats and some moderate Republicans. House Speaker Mike O’Neal, R-Hutchinson, said the 2010 budget only allowed for an ending balance of $17,000 — a small cushion that already appears to be millions of dollars off the mark.

The speaker said he feared the shortfall would lead to future tax increase proposals.

“It is time for a return to sanity in state spending and an end to burdensome taxes on individuals and businesses,” O’Neal said.

Potential lawsuits

The state also could face a lawsuit because it has failed to keep past promises to continue increasing aid to public schools. Schools have lost base state aid of $116 per pupil in this year’s budget cutting.

The state was forced to increase its aid dramatically after the Kansas Supreme Court ruled in 2005 that it had failed to fulfill its duty under the state constitution to finance an adequate education for every child.

Salina public schools Superintendent Rob Winter told The Salina Journal that officials from several school districts plan to meet in July to discuss what to do, mentioning new litigation as an option.

Mark Tallman, a lobbyist for the Kansas Association of School Boards, said most schools can deal with the delay in aid payments by tapping reserve funds. But he noted school boards meet in August to set next year’s budgets and can’t be sure now of how much state aid they’ll get.

As for temporarily suspending income tax refunds, the Department of Revenue also took that step for a few days in February when the state faced an earlier cash crunch.

The department already has paid about 960,000 refunds. Warfield said taxpayers affected by the latest suspension either filed their returns after the normal April 15 deadline, had mistakes on their returns, or faced questions from the department. She also said the department would continue processing returns ahead of resuming payments.


Richard Heckler 9 years ago

My my those repub legislators are certainly not the economic giants of our time who like Bush and reaganomics blew the rainy day surplus thinking they were doing what's best by not planning for a rainy day.

Repubs have become the examples of how to screw up economies. This is what happens when the economic giants NOT preach tax cuts 24/7 with no other source of income to back it up.

Fiscally Irresponsible Management and these people claim to be good business people....hmmmmmmmm

timetospeakup 9 years ago

so merrill - how do you explain the budget situation in california? They are out of money too and last I checked their legislature leans about the opposite direction as ours.

Godot 9 years ago

This legislature needs to make changing the language in the state constitution that refers to funding K-12 a top priority. Amend the vague language that gives the court the leeway to dictate funding levels.

Shardwurm 9 years ago

Sorry Godot. I disagree. If they change the state constitution to say "funding K-12 WISELY is a top priority" then I would agree.

I think if you did an audit of all of the districts and found out how much disgusting waste there is you'd find there's plenty of money available to 'save the children'. It's the bloated garbage that every district adds that's causing the crisis.

Indeed, it's not teaching the children that's the problem - it's the ridiculous things the TEACHERS, ADMINISTRATORS, AND PARENTS want. I've never heard one child say they needed to expand the teacher's lounge so they could learn better.

gl0ck0wn3r 9 years ago

"Richard Heckler (Anonymous) babbled… Fiscally Irresponsible Management and these people claim to be good business people….hmmmmmmmm"

How's the lawnmowing business, Dick? I'd imagine competition is tough this summer with all the kids looking for spare money. It must be hard for a more "mature" individual to keep up.

yourworstnightmare 9 years ago

30 years of tax cuts, started by Reagan, are to blame in California, where Ronnie first tried his experiment, and across the country.

Taxes were cut, but those same tax cutters didin't have the political courage to make the draconian spending cuts that were called for with such tax cuts. Their constituents would not have approved.

So, we have 30 years of this nonsense and now it is starting to catch up. The wealthy and large corporations have made out like bandits, but the chickens are coming home to roost.

yourworstnightmare 9 years ago

What is there left to cut? The answer is middle class entitlements, such as medicare, subsidized education, and such.

Good luck cutting these things, buckaroos!

Sean Livingstone 9 years ago

"timetospeakup (Anonymous) says… so merrill - how do you explain the budget situation in california? They are out of money too and last I checked their legislature leans about the opposite direction as ours."

The biggest problem you can have for a state and this country, is to have a liberal running under the banner of the Republicans, who acted like a conservative to win votes. It's always better to have a Centrist running under the banner of the Democrats, who are trying to win over the slightly right crowds. Everyone knows the far left and far right know who they want to vote for.

For example, Reagan is a Liberal by any means, but wore the Republican jacket to run for election. George W. Bush is a Liberal who wore the Republican jacket, and hypocritically wore the Conservative coat at the same time. Arnie wore the Republican jacket to run for election. What happened? You all know.

The solution? A moderate Democrat who always try to win some moderate conservatives over, and always try to balance the budget.

Sean Livingstone 9 years ago

"lawrenceguy40 (Anonymous) says… nightmare - I don't remember these problems when Reagan was President. Most of the problems seem to have arisen in the last four months!"

Nice, in your mind, the economy downturn, North Korea nuclear crisis, etc begin in the last four months, and nothing to do with the last 8 years.... sounds like someone's jealous.... :P

What are the problems? Let me help you identify the sources of problems (other than just watching Sean Hannity). :)

notajayhawk 9 years ago

merrill (Anonymous) says…

"My my those repub legislators are certainly not the economic giants of our time blah blah blah blah blah."

Good thing we had a Democrat for a governor to keep them in line, eh, merrill?

livingstone (Anonymous) says…

"For example, Reagan is a Liberal by any means"

Off your meds again, stone?

"The solution? A moderate Democrat who always try to win some moderate conservatives over, and always try to balance the budget."

Uh huh. Too bad those don't exist.

"Nice, in your mind, the economy downturn, North Korea nuclear crisis, etc begin in the last four months, and nothing to do with the last 8 years…. sounds like someone's jealous…. :P"

(Psssst - hey stone - Reagan was in office just a little more than 8 years ago.)

"Let me help you identify the sources of problems"

Ignorance like yours has a lot to do with it.

djeyler 9 years ago

Kansas budget has doubled in 10 years. No matter how you want to spin it we will be going broke. Property owners will not be able to foot the bill. The average kansan has no more to give. Just like california life is going to get much worse. We are told we are out of money. The prez said that himself. You know it and I know it but our government is spending like no time in history. We are in serious trouble. Education seems to think they can't give a dime. They are spending 7 billion of our 13 billion state budget. The governor vetoed legislation to defund planned parenthood of $300,000 and give the money to county health departments. So three PPH clinics get cash and dozens of county health departments get nothing. Yep we are in big trouble.

feeble 9 years ago

timetospeakup (Anonymous) says…

so merrill - how do you explain the budget situation in california? They are out of money too and last I checked their legislature leans about the opposite direction as ours

Prop 13 and requiring 2/3 majority vote to pass all budget initiatives/spending bills. The former capped property values ("the maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value of such property. ")

Prop 13 was passed in 1978 and freezes the value of properties at the time of purchase with a possible 2% annual assessment increase. Therefore, properties of equal value have a great amount of variation in their assessment, even if they are next to each other. This create serious inequities and potentially introduce some amount of regressivity into the tax structure.

The state sales tax was increased as a result of Prop 13. The imbalance between state spending and state tax revenues had contributed to near constant budget crisis that has pushed the state to near bankruptcy and deadlocked the political system.

The moral of the story is that Tax cuts must come with commensurate spending cuts. Both sides of the US political spectrum have no problem offering up the former, since it wins votes, but both sides have also proved to be unable to turn the later into reality.

Richard Heckler 9 years ago

Public education is good for business and economic growth because new industry looks at public education policies when relocating. This state does not,in a very public way,support public education nor higher education =business unfriendly = bad for business = bad for increased revenue.

Blowing off a tax surplus was not smart business and cutting taxes 24/7 as the cost of living constantly increases is not a good business practice. A tax increase at the state level would merely be restoring money that should never have been cut.

Not only that tax cuts at state and federal levels eventually increases taxes and user fees at local levels. At local levels constantly adding more and more new miles of infrastructure is truly expanding our tax bills with no new economic growth on the horizon in the way of new industry and good paying jobs to cover this additional expense yet this activity is cheered on....? Makes no dollars or sense.

Locally spending money maintaining existing resources is smart spending because old infrastructure needs care to prevent crumbling and gain more years of life and it creates more real value to a community. This is same principle applied to why people spend money on their homes..... to retain or increase value.

Richard Heckler 9 years ago

Hr 676 National Health Insurance/Universal Health Care/single payer would be good for business,city and state governments because it reduces the cost of doing business substantially. It is estimated to reduce the cost of health care by $360,000,000,000 annually.

The only people who could possibly support inflated costs for health care by the insurance industry have got to be on the take cuz no one in reality believes this is good for business.

Yes the insurance industry loves their socialized tax dollar gravy train@ inflated prices. Who wouldn't? 60% of those insured are covered with socialism tax dollars however this increases our cost living and the cost of doing business everyday = double whammy. How many times a day do we want to pay for high dollar health care?

Insured,uninsured,underinsured,big business and small business all complain about the high cost of medical care. It is simply bad business and bad for business. It is fiscally irresponsible. As one politician pointed out today every industrialized nation is providing health care at half the price of the USA. As we know tons of USA jobs go to these countries which costs the USA new wealth thus new jobs.

The high cost of medical care shows up in most every purchase on the planet = a constant increase in the cost living. How smart is it to support absolute nonsense.

How in the world can health care be free when taxes are/would be paying for it? There is no such thing as free medical care. More fairy tales from the insurance industry.

Your government has been paying out $1.2 trillion socialized dollars to the insurance companies. Is there something wrong with this picture? The insurance industry keeps yelling SOCIALISM yet they accept socialism dollars.

$1.2 trillion dollars would cover insurance costs for the entire nation instead of only 60% under Hr 676 and/or S703 = friendly to business. Also friendly to veterans,senior citizens and anyone who has the desire to open a small business. It would be very friendly to our cost of living.

notajayhawk 9 years ago

Trust merrill to cut-and-paste his usual health care lies on a thread that has nothing to do with healthcare.

notajayhawk 9 years ago

Marion, can you point to the statute that says refunds on taxpayer accounts that had late-filed returns, returns with errors, or returns that needed further information must be paid by a certain date? Like today, for instance?

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