Veto override attempt exposes divided GOP in Kansas Senate

An attempt to override a veto by Gov. Sam Brownback exposed a rift between Senate Republicans on Thursday.

It also showed the governor’s office had withheld from the public information that the state’s bond rating could be at risk.

The override attempt sparked an emotional hour-long debate on the Senate floor and a flurry of messages from the governor’s office on social media saying it would lead to a credit downgrade for the state.

The bill, SB 250, passed the Senate unanimously last month. It barred the Department of Administration from spending money to demolish the Docking State Office Building, which houses the power plant for the Capitol and adjacent buildings.

The department had signed a $20 million lease-purchase agreement to finance the demolition and construction of a new power plant without legislative approval in December.

The project was scrapped after a backlash from lawmakers. They passed SB 250 on the advice of Attorney General Derek Schmidt to enable the state to negotiate the cheapest possible exit from a construction contract with McCarthy Building Cos. and avoid a $3 million penalty.

Brownback vetoed the bill last week.

The override motion by Sen. Kay Wolf, R-Prairie Village, exposed a GOP caucus split between those who remain loyal to Brownback and those who say they are frustrated with his fiscal management.

Wolf later withdrew the motion until Monday to give senators more time to investigate whether an override would lead to a downgrade of the state’s bond rating.

Wolf said the construction company should not receive penalty payments when it did not break ground. “We are protecting the taxpayers’ money,” she said.

Sen. Ralph Ostmeyer, R-Grinnell, called Brownback a personal friend but said he’s never seen the state in such turmoil. He called on lawmakers to stand up to the governor.

“We’re at a crossroads, where we better decide who’s in charge of this chamber,” he said.

Senate Majority Leader Terry Bruce, R-Hutchinson, and Sen. Ty Masterson, R-Andover, however, said the governor’s office had told them that overriding the veto would put the state’s bond rating at risk.

Masterson said the construction contract had already been canceled and that an override wouldn’t accomplish anything. “What’s done is done,” he said.

Bruce said the governor wouldn’t have vetoed the bill if there wasn’t something at risk.

Senate President Susan Wagle, R-Wichita, disagreed.

“It can’t hurt our bond rating. We never approved the project in the first place,” she said.

It takes 27 votes in the Senate to override a veto. Some GOP lawmakers said they could not decide until they knew the effect on the state’s bond rating.

The governor’s office sent a message to reporters saying a veto override would hurt the bond rating while the debate was ongoing.

Brownback said an override could plunge the state to a credit rating of BB.

He said the provision barring funds from being spent “is likely to be viewed by rating agencies as an indication the State of Kansas may also choose not to pay other outstanding obligations in the future.”

He added that it would “signal sufficient uncertainty to bond rating agencies and the credit markets, such that the result could be higher rates and increased expense for any future debt obligations of the State.”

“I think it’s a lie,” said Senate Minority Leader Anthony Hensley, D-Topeka, noting that the governor’s veto message last week did not mention that.

He said the delay was just going to give Sam Brownback and his allies more opportunity to try and beat them (Republican senators) into submission.”

The governor’s office provided a memo to reporters from Paul Maco, a Washington-based attorney and former senior official at the Securities and Exchange Commission, that said SB 250 could result in a downgrade because it would be viewed by rating agencies as “an act of non-appropriation for an obligation of Kansas viewed as debt.”

Eileen Hawley, the governor’s spokeswoman, said the administration shared this information with Senate Republican leaders last week, including Wagle.

Hawley said this information was not included in the veto message because the office was “working on an amicable solution, talking to Senate leadership about it. … There was no secret involved here.”

But Wagle’s office later issued a statement that said this was the first time “we have seen the memo about the bond rating implications. The Governor did not raise the issue in his veto message, nor was it brought to our attention when the Senate unanimously passed the bill 40-0. It appears this late information is being used as a ploy to sway legislators, when the real issue is the squandering of taxpayer funds without legislative authorization.”

Ostmeyer asked why bond ratings had suddenly become such a concern, noting that policymakers had spent the last two years “pooh-poohing the bond ratings” after rating companies had lowered the state’s bond rating based on income tax cuts, which had been ushered into law by Brownback.

“Breaking addictions to high taxes is hard. That’s a difficult thing to do. … We are putting those dollars back into the economy and the bond rating agencies don’t like you cutting taxes,” Brownback said in 2014 when told that Standard & Poor’s had dropped the state’s credit rating from AA-plus to AA, citing his tax cuts as the reason.

This story was originally published March 10, 2016 at 5:39 PM with the headline "Veto override attempt exposes divided GOP in Kansas Senate."