Attorney General Beshear might take Gov. Bevin to court over university cuts if action not rescinded in seven days

04/01/2016 09:30 PM

FRANKFORT — A day after Gov. Matt Bevin informed university presidents that their budgets will be cut 4.5 percent for the final quarter of the fiscal year, Attorney General Andy Beshear indicated he may be taking the governor to court.

Beshear, during a Capitol press conference Friday, asked Bevin to reconsider his action, arguing that the governor does not have the authority to reopen budgets unless revenues fall short of appropriations.

The first-year attorney general said he will give the first-year governor a week to mull his request, which will include a written opinion and a possible meeting, before filing a lawsuit in Franklin Circuit Court.

“If the governor chooses to rescind this order, I will support him fully,” Beshear said. “It is the right thing to do. It’s the legal thing to do. If not, we’ll resort to litigation.”

Bevin, in a letter dated Thursday and addressed to the state’s public colleges and universities, relied on a section of law allowing the state budget director to revise quarterly allotments within the executive branch.

The governor had sought 4.5 percent spending cuts across many areas of state government in the current fiscal year as part of his overall budget request, and postsecondary education and pensions are two key negotiating road blocks between the Democrat-led House and the Republican-controlled Senate as they try to craft a more than $21 billion biennial budget.

Jessica Ditto, Bevin’s spokeswoman, said the administration consulted with General Counsel Steve Pitt and the budget office before sending Thursday’s notice to university presidents. She called Beshear’s actions “premature.”

“We must wait and see what legislative action occurs on the budget before a final determination is made regarding budget allotments,” she said in a statement. “We appreciate the university presidents who recognize our financial obligations to solve our $35 billion pension crisis.”

But Bevin’s office can only revise funding in the event of a revenue shortfall, in Beshear’s opinion. He noted that the current budget includes language that sets out a reduction plan if revenues drop below projections.

“Cutting universities does not appear on that list at all,” he said, “and cutting General Fund appropriations to the executive branch agencies appears sixth on that list.”

Beshear said Bevin’s action would cut $41 million in all from universities’ budgets.

University officials said that as Bevin unveiled his proposed two-year spending plan, they began planning to absorb the 4.5 percent cuts during the final quarter of the fiscal year.

Jay Box, president of the Kentucky Community and Technical College System, said in a statement that KCTCS will tap $8.6 million in emergency dollars, which its board approved at a March meeting.

Without such emergency funds, “it would be impossible for the colleges and other KCTCS operating units to balance their budgets,” he said.

“We have been prudent over the years with our budget by setting aside funds for extreme emergencies, such as natural disasters,” KCTCS Board of Regents Chair Marcia Roth said in a statement.

“Unfortunately, the timing of this cut during the fourth quarter of our budget year left us with no other option than to use these funds. Our priority is always to put our students and hardworking faculty and staff first. The use of these funds are a short-term, one-time measure for this serious situation.”

Jay Blanton, spokesman for the University of Kentucky, said it’s “too early to speculate” on exactly how the Lexington school will handle the 4.5 percent spending reduction.

“Gov. Bevin announced this measure in January, so we anticipated it,” Blanton said in a statement. “We will be working over the next few months to implement this reduction within the context of our current-year budget.”

The University of Louisville, in a statement sent by spokesman John Karman, “understands the critical issue facing the General Assembly is to implement a plan that resolves the pension shortfall” and “will respond to the gubernatorial directive of a 4.5% reduction in the 4th quarter, as we have responded to the 14 budget cuts over the past decade, by working with our faculty and staff to pursue plans that minimize the burden on our students.”

“Our employees are disappointed with this news, but we will work to galvanize support for developing new fund sources that assure our faculty, students and staff have the resources to achieve our strategic goals,” the statement read.

Western Kentucky University President Gary Ransdell said his institution had not yet determined how it would handle the 4.5 percent reduction, “but we will make those decisions in the next few days.”

“Our budget is complex and nearly two-thirds personnel,” he said in a statement. “We will likely have to tap some of our reserve funds to manage a $3.5 million reduction at this late date in the fiscal year.”

Geoffrey Mearns, president of Northern Kentucky University, said in a campus-wide email Friday that the school will have to trim almost $2.2 million during the last three months of the fiscal year.

He will continue to advocate for funding as lawmakers attempt to cobble together a budget agreement, he said, noting that he also understands Bevin’s goal of reducing the financial burden on the state’s struggling pension systems.

“Those increases have had a significant, adverse impact on our University budget,” Mearns wrote in the email. “Although this one-time cost is significant, our University is able to manage this funding reduction through our available reserves.

“Because of our financial prudence, we are not presently contemplating disruptive and drastic actions such as furloughs to manage this unanticipated cost. But this reduction will make it even more difficult for us to develop a balanced budget in the next two years.”

Republicans support Bevin’s cuts; Democrats question legality

Reaction to the governor’s 4.5 percent cuts to state colleges largely split along party lines within the General Assembly, with Republicans backing the spending reductions while Democrats wondered whether Bevin overstepped his authority.

Senate Majority Floor Leader Damon Thayer, R-Georgetown, said universities should not have been caught off-guard by the cuts announced Thursday given Bevin’s budget address in January, and that he thinks the GOP governor is “completely within his rights to do so.”

“I believe that the universities need to be a part of the solution in solving our pension crisis,” he said. “You know, the taxpayers contribute $1 billion a year, that’s 10 percent of our budget, to the universities, and that’s a big chunk of money.”

House Speaker Greg Stumbo, however, offered a precursor to Beshear’s arguments later Friday, saying state law prevents the governor from reducing appropriations without a budget shortfall. If Bevin has the money, he said, the governor must “do what the General Assembly directed through its appropriation powers.”

“I would say that if an old country lawyer like me can read that statute and understand it, that a smart judge in Franklin County can understand it and probably would read it the same way,” said Stumbo, D-Prestonsburg.

House Minority Floor Leader Jeff Hoover, R-Jamestown, questioned why House Democrats prevent Bevin from taking such actions in their version of the biennial budget if Stumbo believed they were already illegal.

“They had to think he could do it or otherwise they wouldn’t have put language in the budget to try and prohibit him from doing it, so I don’t think that argument of the speaker holds water,” he said.

Senate Minority Caucus Chair Gerald Neal, D-Louisville, called the cuts to universities “risky” and “unfortunate,” wondering whether the governor could slash spending while the legislature is in session.

“The thing that disturbs me the most about this is that you have the executive now asserting himself at the time that the legislative branch is struggling with these issues, and these are things that we need to do,” he said.

Interviews with Thayer and Neal by Pure Politics reporter Don Weber.


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