Kentucky Budget Negotiators Trying To Reach Compromise

Mar 26, 2012

FRANKFORT, Ky. -- Negotiators for the House and Senate began talks Monday in an attempt to work through disagreements on spending priorities in a bare-bones state budget.

The Senate passed a two-year, $19 billion budget proposal last week that would cut spending in multiple ways, including eliminating proposed scholarships for Appalachian college students and scrapping cost-of-living increases in the monthly pension checks of some 200,000 government retirees.

Economic indicators show Kentucky slowly rebounding from the recession, but not fast enough to offset additional budget cuts. That has left lawmakers wrangling over spending priorities.

Rep. Brad Montell, R-Shelbyville, said the House and Senate budget proposals don't differ sharply. Both largely adopt Gov. Steve Beshear's proposed 8.4 percent cuts. Both cut back on the amount of new state debt.

"In a budget cycle, like we're in, I don't think that's unreasonable," Montell said. "I can support either version."

The Senate proposal also cuts the amount of new debt in the budget to $391 million. That's $161 million less than the House had authorized and $577 million less than the governor authorized.

House Speaker Greg Stumbo and Senate President David Williams consider reducing debt a major provision of the proposed budget, one that needs to be preserved in the negotiations.

Both the House and Senate endorsed Beshear's proposed tax amnesty plan that lawmakers believe could collect $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.

Beshear had warned of painful cuts when he initially presented his budget proposal to lawmakers in January.

Lt. Gov. Jerry Abramson would have personally felt those cuts under the Senate proposal to eliminate his $30,000-a-year housing allowance.

Abramson receives that in lieu of living in the mansion provided for him and his wife. Kentucky began paying a housing allowance to lieutenant governors more than a decade ago in a cost-saving move. Previously, they lived in a state-provided mansion.

The Senate plan also stripped a proposal to create the Kentucky Appalachian College Completion Program, which would provide grants of up to $6,000 a year to students attending a handful of private colleges in the mountain region. The cost would have been about $6.5 million over the next two years. The House will press to get those grants back in the budget.

State workers wouldn't get raises in any version of the proposed budget. And both the House and Senate agreed to take away proposed 1.5 percent cost-of-living increases for state and local government retirees.