Budget negotiations set to continue Friday and Monday after reviewing differences between House and Senate plans

03/24/2016 09:16 PM

FRANKFORT — Lawmakers have begun the arduous task of negotiating a two-year state budget, offering a public glimpse of differences between the House and Senate proposals Thursday before huddling behind closed doors into the evening.

A 19-member conference committee assembled at 5 p.m. as John Scott, the Legislative Research Commission’s deputy director for budget review, generally discussed how the House and Senate versions of House Bill 303, the executive branch budget, differ.

They adjourned about two and a half hours later, scheduling follow-up meetings for Friday and Monday. Legislators on the panel will not meet Saturday or Sunday for the Easter holiday.

Many senators and representatives at the negotiating table quietly thumbed through a document detailing both spending plans side-by-side.

The Senate passed its version of HB 303 on Wednesday, restoring most of Gov. Matt Bevin’s 9 percent spending cuts and a pair of funds he recommended to help cover future pension contributions and finance workforce development projects. Senators only put half of the money requested by Bevin into those accounts, $250 million for the “permanent” fund and $50 million into the workforce development bond pool.

The House’s version exempted a number of agencies from the proposed spending reductions and included $33 million for Work Ready Kentucky scholarships for community and technical college tuition.

Debate on the budget was sparse, but House Democrats raised questions about Bevin’s recommended permanent fund.

“Maybe this requires more of a legal analysis, but we ‘notwithstand’ language in the statutes all the time,” said House Majority Caucus Chair Sannie Overly, D-Paris, referring to the practice of enacting bills or budget language despite conflicting statutes by using the term “notwithstanding.”

“It just seems to me that if we wanted to truly honor those commitments and we have the funds available, we would make those contributions directly to the pension plans.”

Senators included a provision in their budget that allocates up to $3 million from the proposed permanent fund for performance audits of the state’s pension systems in the biennium.

Senate President Robert Stivers, R-Manchester, told the conference committee that language for the fund will be included in the Senate’s version of the revenue bill, writing it into statute rather than a two-year spending plan.

“This would be dedicated to pensions,” Stivers said. “… You move that money from a permanent pension fund to address that problem after the audit — no more, no less, can’t be used — and defining it as that to solve pension problems is what the purpose is.”

The House’s version of HB 303 would’ve used a $500 million transfer from the state employees’ health fund while the Senate split that fund transfer between higher pension contributions and the recommended permanent fund.

The Senate’s biennial spending plan dedicates about $70 million more to the state’s underfunded pension programs — $913.3 million more for the Kentucky Teachers’ Retirement System and $282.4 million for the Kentucky Retirement Systems, which includes $25 million for the State Police Retirement System — than the House proposal, which fully funds actuarially required contributions to KTRS with more than $1 billion dedicated to the system and nearly $90 million more for KRS.

Bevin again thanked the Senate for restoring his proposed permanent fund and expressed his hope that the 2016 General Assembly will pass a fiscally responsible budget.

“As the House and Senate negotiate the final budget bill, I encourage them to come to the table with open minds and focus on Kentucky’s future,” he said in a statement Thursday.

“I will support the efforts to find common ground so that we can address our pension liabilities and invest in the areas that will create economic opportunity both now and for years to come.”

Scott, the LRC’s budget review deputy director, told the conference committee that legislative staff would need to have a budget draft by midnight Monday if lawmakers hope to pass the document by Wednesday.

Other members of the conference committee include:

House Appropriations and Revenue Committee Chair Rick Rand, D-Bedford

Senate Appropriations and Revenue Committee Chair Chris McDaniel, R-Taylor Mill

House Speaker Greg Stumbo, D-Prestonsburg

Senate President Pro Tem David Givens, R-Greensburg

House Speaker Pro Tem Jody Richards, D-Bowling Green

Senate Majority Floor Leader Damon Thayer, R-Georgetown

House Majority Floor Leader Rocky Adkins, D-Sandy Hook

Senate Minority Floor Leader Ray Jones, D-Pikeville

House Minority Floor Leader Jeff Hoover, R-Jamestown

Senate Majority Caucus Chair Dan Seum, R-Fairdale

House Minority Caucus Chair Stan Lee, R-Lexington

Senate Minority Caucus Chair Gerald Neal, D-Louisville

House Majority Whip Johnny Bell, D-Glasgow

Senate Majority Whip Jimmy Higdon, R-Lebanon

House Minority Whip Jim DeCesare, R-Bowling Green

Senate Minority Whip Julian Carroll, D-Frankfort

Sen. Robin Webb, D-Grayson


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