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Kan. suspends income tax refunds, may miss payroll
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BY JEANNINE KORANDA
Eagle Topeka bureau
* Visit The Eagle’s Wichitopekington blog to read more about the various stances on the budget situation.
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.
http://www.kansas.com/735/story/701750.html