House passes $17.5B budget

State News

By Ronnie Ellis CNHI News Service The Richmond Register Thu Mar 11, 2010, 08:46 AM EST

FRANKFORT — The outcome was never in doubt and after three hours and 24 speeches the House passed its version of a $17.5 billion, project-filled, debt-laden two-year budget 65-33.

There are schools, water and sewer projects and roads for those who voted with Democratic leadership on the plan but there’s less money for education at all levels, cuts to corrections which may hit county jails hardest and few capital projects in Republican districts. One Republican, Rep. Jim Stewart of Flat Lick voted for the measure while one Democrat, Jim Wayne of Louisville voted against it. Stewart voted last week for a $371 million revenue package and he received the only major project in a Republican district.

After his Republican colleagues railed against what they said was retribution for their votes on the revenue measure in the form of no projects in their districts – except for his – Stewart himself spoke, saying by now the entire state realized he was the Republican who voted for the revenue measure.

“I’d like to introduce myself,” said Stewart to laughter from the House. He thanked Democratic budget chairman, his seatmate, Rick Rand for “putting something in the budget for me.”

Other Republicans weren’t so pleased. Minority Leader Jeff Hoover, R-Jamestown, said the Democrat majority punished Republicans for their “philosophical differences” on taxes and later said the state “simply can’t afford” the debt taken on by the budget. He quoted Wayne, who Tuesday said the budget incurs an “appalling” debt ratio of 7.43 percent of revenues needed to pay the debt service. The state typically has attempted to keep the amount of the budget needed to pay its debt to below 6 percent.

Rand, however, said the budget contains less debt than the one proposed by Gov. Steve Beshear, contains no tax increases and several Democrats said it will create or retain 25,000 jobs through the construction projects, a claim House Speaker Greg Stumbo, D-Prestonsburg has made for the past couple of weeks.

Republicans said the budget is “irresponsible,” and compared it to unpopular spending policies in Washington, often invoking the name of President Barack Obama and accused Democrats of supporting “tax and spend” policies. After Hoover’s claim of a philosophical difference over taxes, Rep. Johnny Bell, D-Glasgow, expressed doubt.

It is nearly impossible, Bell said, that all but one Republican would discover the “same philosophical awakening at the same place, at the same time about the same issue. I think it’s politics.” He said Republicans were preparing for their November election campaigns. Republicans like Ken Upchurch of Monticello didn’t argue. He said Democrats would hear the “roar” of angry voters this fall.

But it passed and will now goes to the Republican-controlled Senate where there is resistance to the business tax changes and where bonded capital projects are likely to be altered.

The measure includes $2.2 billion in borrowing: more than $1.3 billion for schools and water and sewer projects; $412 million for roads in the road plan; and $485 million in bonds which will be paid by universities and other agencies from their own funds.

It cuts most state agencies by 2 percent on top of three previous rounds of budget cuts. The budget reduces funding for higher education by 1.5 percent in the first year and 1 percent in the second and provides universities no funding for maintenance and operation of new buildings; takes back $40 million in excess or unused SEEK funding from the public schools but maintains SEEK funding at its current levels for the next biennium. It reduces the school calendar by two days, saving the state $68 million over two years. It does provide full equalization for recallable taxes passed by the Glasgow and Boyd County boards of education.

The budget relies on $256 million in extended federal assistance for Medicaid. Rep. Jimmie Lee, D-Elizabethtown, said that measure passed the U.S. Senate while Frankfort lawmakers debated their budget. The state budget will provide an additional $10 million for social worker security.

There are no pay raises for teachers or state workers’; they’ll pay more for some health insurance plans; and the budget requires reduction of non-merit or political employees in all three branches and a reduction in contracted government services. It proposes to save $30 million in corrections by holding the prison population at its current levels and by releasing as many as 1,000 non-violent, non-sexual offenders.

Most of those offenders are housed in county jails which receive a daily fee from the state for each state prisoner. So at least some of state savings in corrections will be shifted to strapped county budgets.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter. com/cnhifrankfort. The Richmond Register is a CNHI newspaper.

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