Ky. legislature to vote on budget compromise

Kentucky’s legislature will vote April 2 on a compromise regarding the Commonwealth’s budget woes, and if it passes it would mean Northern Kentucky University would lose $1.6 million in state funding.

The negotiated proposal scuttled any plans for raising additional state revenue through an increase in the state’s tax on cigarettes or to impose the state’s sales tax on certain services. Instead, lawmakers settled on a scaled-down spending blueprint that will include 3 percent cuts to public universities.

House Democrats are holding a private caucus meeting to discuss the budget. Lawmakers are expected to vote on the budget proposal late Wednesday.

Some rank-and-file Kentucky lawmakers expressed their unhappiness Tuesday with emerging details of a negotiated $19 billion two-year state budget agreement between the House and Senate.

As legislators poured into the Capitol following an extended weekend due to overtime budget negotiations, many said they were displeased at the proposal’s lack of funding for education and special projects. Some questioned whether the proposal, which legislative leaders crafted behind closed doors, could muster enough support to win legislative approval and head to Gov. Steve Beshear.

“People may calm down, I don’t know,” said Rep. Greg Stumbo, D-Prestonsburg. “But as of right now, I think that if you took a vote right this instant, that it would fall far short.”

Legislative leaders in the House and Senate wrapped up seven long days of tedious budget negotiations Tuesday morning with a final session that stretched more than 20 hours. When they emerged, lawmakers said they had a tentative agreement in place.

House Speaker Jody Richards, D-Bowling Green, declared: “The eagle has landed. We have a budget.”

The negotiated proposal scuttled any plans for raising additional state revenue through an increase in the state’s tax on cigarettes or to impose the state’s sales tax on certain services. Instead, lawmakers settled on a scaled-down spending blueprint that will include 3 percent cuts to public universities.

Some legislators who were asked Tuesday said they disagreed with the idea of not appropriating any money from Kentucky’s coal severance tax or revenue generated from the state’s national tobacco settlement for water, sewer or road projects.

Rep. Hubert Collins, D-Wittensville, said he and other lawmakers from coal-producing counties were not happy that there were no appropriations for water or sewer lines in their home districts.

“There’s nothing in it for a lot of people,” Collins said. “I don’t have anything to take home – nothing.”

Rep. Jim Gooch, D-Providence, said budget negotiators deleted all line items included in the budget for coal severance projects, which has angered many lawmakers in the state’s mining counties.

“I think it’s questionable at this point whether this budget can pass the House,” said Gooch, chairman of the House Natural Resources and Environment Committee.

However, state Sen. Robert Stivers, R-Manchester, said many of those line items didn’t meet the criteria for projects that should be paid for by coal severance revenue. House lawmakers, he said, wanted to use coal severance revenue for “nickel-and-dime patronage expenditures,” instead of the economic development projects it is intended for.

Coal county officials, under the plan being voted on Wednesday, would apply for funding through the Governor’s Office of Local Development, Stivers said.

Legislators are hoping to vote on a final budget agreement by midnight Wednesday in order to preserve their authority to override any possible vetoes by Beshear.

Economic forecasters predict Kentucky state government is facing an approximately $900 million revenue shortfall over the next two fiscal years.

Beshear proposed an austere two-year budget that called for 12 percent cuts to public universities and numerous government agencies and programs. Beshear called on lawmakers to avoid the cuts by passing a cigarette tax hike of 70 cents a pack to generate nearly $200 million per year.

Beshear, a Democrat, also pushed lawmakers to approve a constitutional amendment aimed at legalizing casino gambling. The plan could have generated at least $500 million per year in gambling proceeds if approved by voters, Beshear said.

The House and Senate proposed different approaches aimed at raising millions more in revenue to carry Kentucky government through the tough financial times expected ahead.

Lawmakers in the Democratic-controlled House proposed raising the cigarette tax and imposing the state’s 6 percent sales tax on certain services. That proposal also was rejected by budget negotiators.

Members of the GOP-led Senate, meanwhile, balked at the idea of raising any taxes. Lawmakers, however, agreed to take $14 million more from the lottery during the next two years.

In all, the negotiated budget proposal would raise about $350 million in new revenue over the next two years, Richards said.

Still, Beshear said in a written statement that he was “disappointed” that the proposed budget did not raise recurring state revenue.

Richards said lawmakers also included money to keep proposed bridges in Louisville on track, and included language to allow for tolls.

Among other things, the agreed budget would give teachers and state employees pay raises of 1 percent in each of the next two fiscal years. It would also put $60 million into Bucks for Brains, a program that provides state matching money for private donations to universities for research and other spending.

Sharron Oxendine, president of the Kentucky Education Association, said the agreement was “insulting” to public school teachers and employees who, like everyone else, are facing increasing costs in the price of gasoline and college tuition. Oxendine said legislators should have pushed harder for alternative ways to fund teacher and public school employee pay raises of 5 percent in each of the next two years.

“We know the economy’s weak, but they had the opportunity to do some modest tax reform and increase the cigarette tax, and they chose not to,” Oxendine said.

Rep. Kathy Stein, D-Lexington, said the General Assembly should push harder to raise the cigarette tax as a way to improve health and offset funding cuts.

“It’s bad news all around,” Stein said of the proposed budget.

Rep. Tom Burch, D-Louisville, said he was leaning against casting a vote in favor of the plan.

“We had an opportunity to at least soften the blow for the people of Kentucky,” Burch said. “But now we’re just going to put a heavier burden on them.”