KET Legislative Coverage

Negotiations Ahead for State Budget Plan

by Renee Shaw | 03/25/14 1:02 PM

With sparse discussion and none of the rancor that routinely characterizes budget considerations, the Senate versions of the state executive, judicial, and legislative budget measures passed out of a Senate committee and the full chamber yesterday. The budgets now return to the House where they originated for likely rejection followed by negotiation with Senate members.

Most of the discussion focused on the bill that funds the executive branch of state government. The nearly $20 billion, two-year spending plan approved by the GOP-dominated Senate tries to hold the line on debt and borrowing, while sparing education, corrections, and Medicaid from the budget ax.

The Senate version reverses the 2.5 percent cut to higher education proposed by Gov. Steve Beshear and the House, but maintains the suggested 5 percent cuts to many state agencies. Senators kept raises for state employees, yet the Republican plan only encourages school districts to increase teacher pay based on availability of funds.

The Senate version also maintains proposed relief for Property Valuation Administrators and strips away $65 million in bonds to support Lexington Convention Center project to expand Rupp Arena.

It also cuts proposed funding for the Quality and Charity Care Trust Fund, which helps University of Louisville Hospital care for uninsured indigent patients. The Senate budget partially restores funding for the Child Care Assistance Program, unlike the full restoration the House had provided.

In testimony before the Senate Appropriations and Revenue Committee, Greg Rush, deputy director for budget review for the Legislative Research Commission, compared the Senate committee substitute, the House proposal, and the Governor's recommended budget.

The Senate Republicans' budget authorizes $263 million in General Fund supported bonds, compared to $1.07 billion recommended in the plans presented by the governor and the House.

The proposed budget also affirms Senate Republicans' philosophical opposition to Obamacare by prohibiting the use of General Funds for the health benefits exchange or expansion of the Affordable Care Act. However, the budget proposal assumes a $166 million savings from the Affordable Care Act.

Speaking on the Senate floor, Sen. Julian Carroll (D-Frankfort) lamented the staggering increases in health care expenses since he was governor in the 1970s. He noted that the state employee Health Care Trust Fund and Medicaid cost Kentucky $9.5 billion annually. He supported a cost-saving demonstration project contained in the budget, which he's optimistic will stay in the plan.

Senate Minority Floor Leader R. J. Palmer (D-Winchester) applauded his Republican counterparts for fully funding retirement plans, maintaining commitments to K-12 education, and restoring the 2.5 percent cut to higher education. But he expressed concerns about language that makes raises for teachers optional instead of mandatory.

Senate President Robert Stivers (R-Manchester) focused on the coal severance tax expenditures. He celebrated the restoration of funding to first-generation college scholars and the expansion of funding for the Gatton Academy of Math and Science at Western Kentucky University. Late in his remarks, he spoke of a new program he forged in cooperation with House Majority Floor Leader Rocky Adkins (D-Sandy Hook) and Morehead State University.

Sen. Reggie Thomas (D-Lexington) embraced the appropriation of $189 million for K-12 education over the next biennium, as well as the restoration of funding to higher ed. He was equally passionate and unhappy about the proposed cuts to the state-run health benefit exchange.

Sen. Brandon Smith (R-Hazard) rose to alert eastern Kentuckians and the press that the budget remains incomplete - not by accident but by design.

The Senate Committee Substitute to House Bill 235 (that's the Senate version of the executive budget) cleared the chamber on a vote of 25 yes votes, 2 no votes, and 11 pass votes. It now goes back to the House.

A conference committee composed of members of both chambers is likely to cobble together a compromise. The same treatment is expected for the legislative and judicial branch budgets passed by the Senate yesterday and returned to the House.

Watch Legislative Update each weeknight during the session at 11 on KET. Follow me on Twitter @ReneeKET.

Senate reporter Steve Shaw contributed to this post.