Gov. Laura Kelly’s administration has pulled back a loan payment that would have undercut her plan to balance the budget without deep cuts in response to economic fallout of the coronavirus pandemic.
Kansas Treasurer Jake LaTurner on Friday made the $132.1 million loan payment to the Pooled Money Investment Board, which invests idle state funds. LaTurner said he was required by state law to make the payment.
He said the Department of Administration reversed the payment. Delaying the payment is one of the building blocks of the governor’s plan to get through at least fiscal years 2020 and 2021 without making deep cuts in the state budget.
“We made the payment based on statute and the payment was reversed by the Department of Administration,” LaTurner said.
“I have no evidence or no directive or nothing from the administration that explains why or where the authority to not make that payment or to reverse that payment comes from,” LaTurner said.
The governor has proposed delaying a $132.1 million payment in each of fiscal years 2020 and 2021 as part of her plan to dodge cuts in key areas such as education and transportation.
However, Republican lawmakers have openly questioned whether the governor can legally delay that payment under state law.
Their lawyers have advised them that the payment to the Pooled Money Investment Board can’t be stopped.
Budget Director Larry Campbell told lawmakers on Friday that the payment would be delayed and the incoming Legislature would be asked to ratify the move next year.
“From day one, Gov. Kelly committed to protecting and rebuilding Kansas’ education, infrastructure, and our tools to recruit new businesses,” the governor’s office said in a statement released Saturday night.
“In the midst of the worst public health crisis in a century, the governor believes more than ever, that protecting those foundational services will get Kansans back to work and back to school, and to ensure that our state can continue to be competitive in the 21st century economy,” the statement said.
“She will use every resource her administration has to keep that commitment.”
LaTurner said the PMIB payment was made as a natural course of events.
“This is not a gotcha,” LaTurner said. “We made the payment last year and we made the payment this year. That’s our job.”
LaTurner said he would consult with the legal counsel Monday about how to proceed. The Pooled Money Investment Board is set to meet Monday afternoon.
Kelly administration officials, however, believe that the controversy engendered over the governor’s budget proposal is part of a concerted effort by Republican lawmakers to force the governor into budget cuts in an election year.
The governor’s plan makes some one-time cuts, delays some loans payments and gives up some increased spending to avoid making cuts in areas like education and transportation.
Delaying the payments to the Pooled Money Investment Board, for instance, gives the governor some breathing room to make budget adjustments without affecting key government services.
Using the money to make the loan payment forces the administration into tougher budget decisions that could have more serious ramifications than what the governor proposed.
House Majority Leader Dan Hawkins said Sunday that the governor needed to take responsibility for her own actions.
“This is further proof that there are few sure things in life: death, taxes, and Governor Kelly passing the buck,” Hawkins said in a statement.
“The governor is once again engaging in unlawful activity yet somehow trying to blame the Legislature,” he said.
