Kan. suspends income tax refunds, may miss payroll

TOPEKA, Kan. - Kansas has suspended income tax refunds and may not be able to pay employees on time, state officials said Monday.

The state doesn't have enough money in its main budget account to pay its bills, prompting Democratic Gov. Kathleen Sebelius to suggest borrowing $225 million from other accounts throughout state government. But the move required approval from legislative leaders, and Republican leaders refused Monday.

Budget Director Duane Goossen said that without the money, he's not sure the state can meet its payroll. About 42,000 state employees are scheduled to be paid again Friday.

He added that the state might also have to delay payments to public schools and to doctors who provide care to needy Kansas residents under the Medicaid program.

Goossen said the state stopped processing income tax refunds last week.

Sebelius accused Republicans, who hold majorities in both chambers of the state legislature, of blocking the accounting maneuver to "play political games."

Republican leaders said it's illegal under Kansas law to shift the funds around as long as the state continues to face a projected deficit in the budget for the fiscal year that ends June 30.

GOP leaders are hoping to pressure Sebelius into signing a bill making $326 million in adjustments to the budget for the fiscal year that ends June 30. Almost half of the adjustments are spending cuts.

Legislators approved that bill last week, but it has not reached the governor's desk. Sebelius hasn't said whether she will sign it.

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