TOPEKA – Governor Laura Kelly said the state of Kansas repaid a $ 300 million government loan taken in 2017 to comply with cash flow requirements amid a budget deficit due to aggressive tax cuts. state revenue.
The prepayment of the full amount borrowed from the Pooled Money Investment Board this month coincided with revised government revenue projections, potentially creating a $ 2.8 billion surplus in general treasury. The forecast prompted the Democratic governor and other politicians to approve the repeal of a 6.5% state sales tax on grocery purchases, a blow to the $ 450 million budget by year.
“The government, like every Kansan, needs to balance its checkbook,” said Kelly, who is running for re-election in 2022. “With three years of fiscal responsibility, we’ve paid off this debt, continue to fund our schools and roads, and we we can afford good policy – like the elimination of the state food tax – to provide tax relief for Kansas families. “
The Pooled Money Investment Board, or PMIB, is a state entity that manages and invests unused cash held by state and local units of government.
House Speaker Ron Ryckman, a Republican from Olathe, said the governor was following instructions from the Kansas legislature regarding repayment of the loan. He said Kelly previously recommended extending the loan repayment period and also proposed financial changes to the Kansas public employee retirement system.
“The governor’s about-face is not surprising with an election year looming,” Ryckman said. ” Let’s be clear. Earlier this year, Kelly’s plan was to delay repayment of the PMIB loan by 10 years and mortgage the KPERS pension plan. The legislature retaliated and adopted a directive to prepay this debt. So the governor simply followed the law put in place by the legislature and wants to grab the headlines. “
In 2017, under the administration of Republican Governor Sam Brownback, the state took out a “bridge loan” from PMIB to comply with state laws regarding cash flow. In 2012, Brownback signed a law reducing state tax revenues by about $ 1 billion. He did not approve comparable spending cuts, which ultimately led to extreme budget problems. The GOP-led legislature repealed much of its tax program in 2017.
Adam Proffitt, the governor’s budget manager, said the PMIB loan was repaid two years earlier than the original schedule.
“This is no small task, especially in times of economic uncertainty,” Proffitt said. “As a result of Governor Kelly’s leadership and his prudent budget decisions, the budget has not only stabilized, but has revitalized the economy.”
The governor’s office said evidence of Kelly’s budget management can be found in the full funding of Kansas public schools over the past three years, the creation of 30,000 jobs, $ 7 billion in new business investment and the implementation of a statewide infrastructure program that included more than 130 upgrade projects. highways, bridges and broadband.