Late yesterday, Kansas Governor Kathleen Sebelius (Democrat) succumbed to pressure and gave up on her attempt to hold state employee paychecks and taxpayer overpayment refunds hostage for $225,000,000.00 in ransom.

Sebelius’s overspending on unnecessary programs, and unwillingness to heed warnings last year from the Republican-led state legislature that a failure to trim budgetary fat would lead to a 2009 crisis, put Kansas’ state government in such a budget crunch that its only options were to cut hundreds of millions of dollars from its bloated budget or to add to the $550,000,000.00 it had already borrowed from itself in late 2008 — a total that must, by law, be repaid by the June 30 end of the 2009 fiscal year.

The Republican legislature addressed the crisis by passing a measure to cut the budget by $326,000,000.00 — around 4.25% per department, according to the Kansas City Star.

Sebelius responded to the proposal to decrease the budget by accusing Republican lawmakers of “playing politics,” and ratcheted up the pressure on them to approve her increase of the state’s debt to itself to $775,000,000.00 despite the illegality of doing so without being able to guarantee that it would be paid back.

Sebelius attempted to force the legislature’s hand by putting a hold on all state employee paychecks and canceling the tax refunds owed to workers who had more of their income taken by the state than the latter was legally entitled to, but state GOP leaders stood firm, and, under increasing political pressure due to state and national media picking up the story of Kansas’ financial hostage crisis, gave way at the end of the day and signed the Republican budget-cut bill.

At what the Kansas City Star called “a hastily-called late afternoon press conference,” Sebelius announced that the proposal she had previously labeled an example of “playing politics” was now “responsible,” adding that she was “just sorry we had to have this high drama and worry a lot of Kansans.”

Sebelius used her line item veto power to cut the budget legislation from $326,000,000.00 in reductions to an even $300,000,000.00, but the cuts are still sufficient to successfully erase the current $200,000,000.00 state budget deficit, with enough left over to begin chipping away at the $1,000,000,000.00 deficit in the FY2010 budget.

In exchange for her capitulation on the budget cut legislation, Republican lawmakers say there has been enough money saved that they can now sign off on Sebelius’s $225,000,000.00 borrowing request without fear of being unable to comply with state law by repaying it by June 30.