Lawmakers Continue Budget Talks as Deadline Looms

Despite a volley of proposals and counterproposals on Tuesday, a conference committee negotiating a new, two-year budget for the commonwealth has yet to find agreement.

Yesterday started with a mid-morning press briefing by Gov. Matt Bevin and Republican legislative leaders who all said they were ready to negotiate a deal and arrive at a budget before the General Assembly is scheduled to adjourn in mid-April

“We are here, we are in session, we will be here at any hour on any day for the next two weeks to meet at any time to talk about this issue,” Bevin said.

The governor wouldn’t commit to restraining his veto pen if the General Assembly sent him a budget after the veto recess period. He said that would be an abdication of his responsibility as governor. The governor did stop short of calling House Democratic leaders obstructionists in the budget talks, but he said he is receiving emails from Kentuckians who want the process completed without the need to call a special session.

Bevin said any tactic by Democrats to wedge the budget battle into future political contests is a misguided approach.

“If they are trying to play the budget and use this opportunity to play political games for 2016 elections, the people should be appropriately outraged. It’s irresponsible, it’s hardly what we were sent here to do,” Bevin said. “Getting re-elected should not be the number one driver behind decisions that are made in this town… We were sent here to do the will of the people, we were sent here in this session specifically to pass a budget, [and] passing a budget is what we should do.”

House Democrats Reveal a New Option

About 30 minutes after the GOP press conference Tuesday morning, House Democratic leaders announced their compromise when they came to the negotiating table. House Budget Chairman Rick Rand (D-Bedford) said their plan includes some performance-based funding for higher education in the upcoming biennium. Both Bevin and Senate Republicans favor tying public university and college funding to certain metrics that the institutions must meet.

Another key portion of the Democrats’ offer includes allocating money to a fund for future payments to the ailing public employee and teacher retirement systems.

“We would agree with the $250 million in the permanent fund that we’re going to establish,” Rand said. “On our side of the ledger, we want to fully restore the cuts to education, K-12 and higher education, that’s $304 million… We think that this is a reasonable compromise. It gives the governor what he wants, his contribution to the pension system, it gives him his permanent fund, and it allows us to move education forward in the state.”

House Speaker Greg Stumbo (D-Prestonsburg) added that Democrats want language that specifically allocates the $250 million for the budget reserve trust fund to go to pension payments.

Senate Republicans Offer a Counterproposal

After a brief break, Republican negotiators issued their counter offer. Senate Budget Chair Chris McDaniel (R-Taylor Mill) said their structurally balanced plan would reduce the amount of money going to the state’s Rainy Day Fund and the contributions to the Kentucky Employees Retirement System and the Kentucky Teachers’ Retirement System. A portion of the savings would help restore half of the proposed cuts to the budgets of the state’s constitutional offices.

“This will take the budget reserve trust fund from $373 million down to $298 million, and it will reduce KERS and KTRS each by $37.5 million after this proposal,” McDaniel said. “This leaves a remaining balance to be appropriated of $19 million, which we’re willing to allow [House Democrats] to make the decisions as to how to appropriate that.”

The Senate counterproposal still includes reductions for the state universities and community colleges. Stumbo says House Democrats cannot sign off on the proposed cuts without knowing how those reductions could affect the institutions and their students.

“I want to know what impact this has on college tuition because that is in effect a tax increase to every Kentuckian who’s sending their kids to college,” Stumbo said. “Until we can see the effect, it may or may not be devastating, we don’t know, we don’t have that information. If you have information like that, we’d love to see it.”

The budget talks wrapped up shortly thereafter without a settlement. Because time is of the essence, legislative leaders have agreed to adjust the calendar to buy them more time to craft a compromise. Negotiations resumed this morning, but lawmakers will not gavel into session until the end of the week. Conferees hope to hash out a deal by Thursday and vote on the budget on Friday.

Senate President Robert Stivers (R-Manchester) had hoped to adjourn the session on Friday, April 12, as originally scheduled. But to facilitate the negotiations, Stivers relented and said the session could end on April 15 if a budget agreement is reached. If lawmakers fail to reach a settlement, the legislature would sine die on April 12.