State shifting accounts to pay bills; contentious debate ensues over fiscal policies

? Kansas will shift $675 million among various accounts so the state can pay its bills on time over the next year, but a meeting Thursday in which Republican Gov. Sam Brownback and legislative leaders approved the move turned into a contentious, partisan debate over his fiscal policies.

Brownback met with eight top lawmakers, including the Legislature’s two Democratic leaders, because state law requires that his administration has their consent for the routine shifting of funds. The state credits money from various accounts to its main bank account — the general fund — to cover gaps between revenue collections and spending, but must reverse the transactions before the following July.

The internal borrowing last year was $300 million, and it had declined since 2010. Democratic legislative leaders suggested the amount is jumping this year because the state’s finances are crumbling after massive personal income tax cuts enacted by the GOP-dominated Legislature at Brownback’s urging. Brownback and top Republican lawmakers offered a spirited defense of his policies, saying the tax cuts are creating economic growth as intended.

House Minority Leader Paul Davis, a Lawrence Democrat, is challenging Brownback’s re-election this year, and Senate Minority Leader Anthony Hensley, a Topeka Democrat, is a vocal critic of Brownback’s administration.

“Is, in fact, the fiscal situation of the state deteriorating?” Hensley asked.

Brownback said the state’s situation is far better now than when he took office in January 2011 because private-sector employment is growing and unemployment remains well below the national average. The state Department of Labor released a report Thursday showing that the seasonally adjusted jobless rate remained at 4.8 percent in May and the number of people holding nonfarm, private-sector jobs grew by 14,800, or about 1.3 percent, compared with May 2014.

The state will cut its top personal income tax rate by 40 percent by 2018 and has exempted the owners of 191,000 businesses from paying any income taxes.

“If we hadn’t cut taxes, particularly for small business, to create jobs and opportunities, we wouldn’t be in near as good a situation as we are,” Brownback said. “We’re seeing growth take place.”