Kentucky Ponders Lean Budget
More than 30,000 government workers will go without pay raises and some 200,000 retirees won’t get cost-of-living increases in their monthly pension checks under a bare-bones budget proposal that legislative leaders have agreed to present to their colleagues for floor votes Friday.
Negotiators reached an accord early Thursday on the budget proposal that also calls for sharp cuts to most government agencies and programs.
“This is a budget that reflects the toughest economy we’ve faced since the Great Depression,” said House Floor Leader Rocky Adkins, D-Sandy Hook. “All of us wish we could do more, but the revenues just are not there to do what we would like to do.”
Three days of intense talks ended early Thursday morning when legislative leaders exited a conference room with a tentative deal on the two-year, $19 billion spending plan that still needs approval from the full House and Senate.
The House and Senate will consider the measure late Friday with only one day to spare before the end of the legislative session.
Meanwhile, negotiators were set to tackle the state’s road budget on Thursday, a $3.5 billion construction plan that will likely involve another round of marathon negotiations.
Lawmakers also are pushing to pass Gov. Steve Beshear’s tax amnesty plan that he believes could collect a badly needed $55 million over the next two years. It would be the state’s first offer of tax amnesty in a decade, and would forgive some penalties if people come forward and pay their taxes.
With time running out in this year’s legislative session, Beshear had urged lawmakers to work out differences on the stalled budget process so he wouldn’t have to call them back to Frankfort to finish their work after the legislative session ends.
“I think the one thing the people of Kentucky would not accept is the legislature leaving town without a budget,” Beshear said. “And so I feel confident that they all understand that, and they’re going to work hard to make that happen.”
The agreement calls for 8.4 percent spending cuts, which will be especially difficult for agencies that have already trimmed their budgets by more than 30 percent over the past four years.
Lawmakers scraped up funding for some high priority projects, including $2.5 million to begin design work on a proposed renovation of Rupp Arena, home of the University of Kentucky basketball team that will be playing the University of Louisville Saturday in the Final Four of the NCAA Tournament. They also agreed to pony up $3.5 million for improvements at the Kentucky Horse Park north of Lexington.
With revenues only now beginning to creep upward after years of decline, Beshear and lawmakers didn’t consider tax increases to improve the financial picture, fearing that would hurt the economic rebound.
One of the final sticking points involved whether to pre-approve the authorization of $100 million in debt for the School Facilities Construction Commission to build new schools beginning in 2014. The Senate objected to that, but finally relented early Thursday.
The Democratic-controlled House and Republican-led Senate had been engaged in increasingly contentious talks, which in years past have always been conducted out of public view. This year, they have allowed cameras from public television station KET into the conference room where they’re meeting. Reporters have been able to monitor the talks via the KET feed.
Lawmakers had long ago exempted themselves from the state’s open meetings law.
The Senate pressed to reduce the amount of new debt, and the agreement set that amount at about $400 million, down from the $1 billion Beshear had initially proposed when he presented his budget plan to lawmakers in January.
Negotiators were able to reach an accord on an appropriation of more than $40 million for indigent hospital care in Louisville, another of the final sticking points.
Lawmakers also agreed to eliminate a $30,000-a-year housing allowance for Democratic Lt. Gov. Jerry Abramson, a relatively small appropriation that was first proposed by Senate Republicans. Beshear said Wednesday that he and Abramson are fine with that cut.
One of the sticking points involved how revenue from the state’s tax on mined coal would be appropriated, including $6 million that House Democrats want to use to provide scholarships to Appalachian college students.
In a compromise, that program was extended to college students in all of Kentucky’s coal-producing counties, including those in western Kentucky.
Negotiators began work Thursday on the state’s two-year, $3.5 billion Road Fund budget. The House and Senate have more than 200 pages proposed road construction projects.
Jefferson County, home to the state’s largest city, would get more than $500 million in the 2013 and 2014 fiscal years, under the House proposal.
That proposal also has more than $80 million going to road and bridge projects in Floyd County, represented by Stumbo, and just short of $15 million going to Cumberland County, represented by Williams.
