The Kansas State Finance Commission has approved the budget office’s request for a $600 million certificate of indebtedness for the 13th year in a row.
The transaction, which borrows against revenue expected later in fiscal 2012, allows the state to balance regular expenses with the peaks and valleys of collections.
Gov. Sam Brownback, who is a member of the Finance Commission, said the action is necessary for proper cash flow.
“I don’t like the idea of the state operating on credit,” Brownback said. “But I am pleased that we were able to lower this year’s request by $100 million and it is my intention to continue to lower that figure in the years to come.”
Brownback, a Republican, said the state collects a large portion of its annual revenue in April, when income tax returns are due, but its biggest expenses come in January, July, and December.
The $600 million loan must be repaid by the end of fiscal 2012.
Last year’s transfer of $700 million was returned to the general fund last week as fiscal 2011 ended.