State Borrows From Itself

The Kansas Finance Council last week authorized the state to borrow up to $250 million from several of its fiscally healthy funds. The move comes after the state did not have enough money in early December to make its monthly payments to public school districts.

Gov. Kathleen Sebelius had suggested a loan of $400 million, but state budget officials said $250 million will be sufficient to meet the state’s needs through mid-February. The Legislature will convene Jan. 12

The latest payment to the state’s 295 school districts was to have been $220 million, but Kansas had only $165 million available. The state borrowed $300 million from itself in summer.

The Kansas Legislative Research Department said in early November that the state would have a $141 million budget deficit at the end of fiscal 2009 on June 30.

Alan Conroy, director of the forecasting group, said the state expected to collect nearly $410 million in revenue during November, but instead collected $396 million. Personal income taxes, which are the largest single source of general revenues for the state, were expected to come in at almost $181 million, but instead generated less than $175 million.

Total general fund collections from the start of the fiscal year on July 1 through Nov. 30 was $2.24 billion.

In June, Sebelius asked state agencies to cut spending by 2% in fiscal 2009 and 5% in fiscal 2010.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER