Kansas lawmakers approve $900 million loan

Capitol Bureau

TOPEKA, Kan. (KSNT) – Lawmakers on the State Finance Council have approved a $900 million certificate of indebtedness. The money will be borrowed from the state funds and be used to cover expenses that otherwise the state would not be able to afford.

The council originally met Thursday afternoon to go over budget concerns for the fiscal year 2021 that includes an estimated $653 million shortfall. Republican council members were concerned about the $900 million loans with many saying they had only received the information that day and did not have a chance to look it over. The council voted to table the certificate of indebtedness until a future meeting, but no later than July 8, 2020.

Shortly following the meeting, Governor Laura Kelly’s office sent out a press release condemning the Republicans that voted against the loan. In the release, the governor said:

“Without this certificate, we threaten the future of our state — we can’t pay our teachers, we can’t pay our 40,000 state employees, and we can’t get the PPE we need to protect Kansans from the threat of COVID-19. I won’t let that happen, so I will call back the State Finance Council tomorrow morning, and every morning until our Republican colleagues approve this certificate of indebtedness.”

Speaker of the House Ron Ryckman, R-Olathe, said the governor’s press release was unnecessary. He added that the council members were simply looking for more time to go over the loan and its effect to state finances, which include putting the state $1.5 billion in debt in the fiscal year 2022.

“Based on this plan, there’s less than $100 million of cuts and a lot of transfers, a lot of pushing things off to the next year,” said Ryckman. “We’ll be faced with a $1.5 billion deficit that we’ll have to find a way to balance next year.”

Senate President Susan Wagle, R-Wichita, called out the governor for not properly leading through this crisis and pushing off budget cuts to the legislature.

“You, with the plan you gave us yesterday, are expecting them to make the cuts next January,” said Wagle. “You are refusing to lead.”

Despite concerns from the council, the $900 million certificate on indebtedness was passed with every council member except Senator Wagle voting in favor.

Senate Minority Leader Anthony Hensley, D-Topeka, said a certificate of indebtedness is common in times of financial strain.

“It allows us to pay our bills, particularly as of this next month, we have to pay the school finance bill, and obviously, we have to pay our state employees,” said Hensley. “When we come back in the 2021 session, we’ll have some very difficult decisions to make.”

Hensley added that there is a possibility that the Federal Government will help states with a financial bailout. Right now, all federal funding through the CARES Act must be used for coronavirus-related expenses and cannot be used to backfill state budgets. Many state governors are asking for financial assistance.

Following the council meeting, Governor Kelly expressed her enthusiasm with the council’s decision.

“We got the certificate of indebtedness passed, and we can now continue to operate the state,” said Governor Kelly. “So I’m very excited about that.”

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