Gov. Kathleen Sebelius is demanding the Kansas Legislature join with her in violating state law to use the budget crisis to score political points, top House Republicans told Kansas Liberty Monday.

"The Legislature doesn't have the luxury of operating outside the law,” said House Speaker Mike O’Neal. “Kansas for years has had on the books procedures a governor can follow in times like these, but she's refused to exercise those options, to the detriment of the state. She's better than that. It just seems she's going out of her way to make people upset with the Legislature."

The latest budget drama began Monday when Sebelius called a meeting of the State Finance Council to seek authority for a $225 million certificate of indebtedness to cover a cash flow crisis.

That meeting ultimately was postponed, Republican legislative leaders said, when they made clear to Sebelius that the Legislature couldn’t authorize additional debt.

O’Neal and House Majority Leader Ray Merrick, in conversations with Kansas Liberty, cited an analysis by Legislative Research Director Alan Conroy that concludes such an action would be illegal because the state wouldn’t be able to cover the certificate by the end of the current fiscal year, on June 30, as required by state statute KSA 75-3725(a).

However, the Sebelius administration contended Monday that approval of an additional certificate of indebtedness would not be contrary to state law.

"Legally we are ready to go," said State Budget Director Duane Goossen at a hastily called press conference late Monday.

Goossen had created a spreadsheet that he said described how the certificate of indebtedness could be used to borrow money, and that all that was needed was authorization by the State Finance Council. He was less clear on how the money would be repaid, a legal requirement. The certificate would raise internal borrowing to record levels.

Goossen said he was hopeful that state employees would get their paychecks Friday, but that he was uncertain whether the state could meet that fundamental obligation without additional debt authority. He indicated that the state had about $10 million in the bank, and that $23 million would be needed to pay state employees Friday.

Merrick said the Sebelius’ administration’s “sky is falling” scenario of state employees not getting paid, tax refunds being delayed and schools getting temporarily stiffed on scheduled state payments was merely political posturing to cover her inaction on the state’s budget crisis.

“There are other options available to her that she’s refused to exercise,” he said. “She’s known for months that we had a heck of a problem, and she’s done nothing to address it.”

Merrick pointed out that the $225 million would have brought to $775 million the amount of certificates issued in the current fiscal year, “the most,” he said, “in Kansas history.” Conroy, in a written response to a query from O'Neal, expanded on Merrick's comment:

"The Governor has requested that the State Finance Council issue another, or third, Certificate of Indebtedness in the amount of $225 million, for a total of $775 million in the current fiscal year. By previous State Finance Council action (June 27, 2008) a Certificate of Indebtedness of $300 million was issued for the beginning of FY 2009 and another Certificate of $250 million was issued on December 16, 2008. With the issuances of all three Certificates combined, it is at $775 million, the largest total issued amount of Certificates of Indebtedness in Kansas history. The previous largest amount was $550 million that was issued earlier in FY 2009. This will be the first time that three Certificates were in place at the same time."

Merrick said Sebelius was attempting to cast the Legislature in the role of blackmailer.

“She’s trying to make it sound like we’ve got a gun to her head to try to force her to sign Senate Bill 23 [the so-called rescission budget],” Merrick said. “The fact is no one has said she has to sign Senate Bill 23.”

Rather, he said, the Legislature wants her to at least signal that sufficient cuts contained in the bill will be enacted so the Legislature is assured that it will be able to cover the certificates to comply with state law.

“We’ll have the bill on her desk within 24 to 48 hours and she can take a look, and then we can reconvene before the end of the week,” Merrick said.

Some in the Kansas media have suggested if the Legislature were to comply with Sebelius’ demand for more debt authority, it would represent a simple technical violation of state law.

O’Neal, a lawyer, disagreed. “It sounds more fundamental than technical to me.”

O’Neal said he was disappointed, but not particularly surprised, that Sebelius and her political allies would attempt to blame Republican legislative leaders for a budget impasse that he said is solely of her making.

Other Republicans said Sebelius was counting on a friendly state media to headline some of the more volatile claims - including not paying state workers or not issuing tax refunds - to mask the more complex issues in play. Sen. Ty Masterson, an Andover Republican, told Kansas Liberty,  "Sebelius is counting on a sympathetic media to sway public opinion her direction."

The Associated Press and most newspapers covering the story on Monday led with the no-tax-returns story.

Senate Democratic Leader Anthony Hensley, in a statement distributed late Monday, attempted to liken Kansas Republican leaders to former Speaker of the U.S. House Newt Gingrich, a favorite whipping boy of Democrats.

“Without a certificate,” Hensley said, “the State of Kansas will be unable to meet its obligations to make payroll for thousands of state employees, to pay refunds to income taxpayers, and to provide Medicaid assistance to countless disabled and elderly Kansans.  To put the livelihood, health and welfare of Kansas citizens at stake just to win political points is inexcusable.”

O’Neal responded: “It’s typical of Sebelius apologists to ignore facts and embrace fantasy to make her look good,” he said.

He also invited state employees who are worried they might not get their paychecks to contact the governor’s office and the Department of Administration.

“They’re capable of making payroll if they choose to do it,” O’Neal said.

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