Budget talks stall on pensions, higher ed as deadline to pass budget in time to override vetoes expires

03/31/2016 06:21 PM

FRANKFORT — Legislators will not be able to override any vetoes issued by Gov. Matt Bevin after negotiations on a more than $21 billion biennial budget broke down on Thursday.

The General Assembly is scheduled to reconvene at noon Friday, and lawmakers had hoped to have an agreement in place early Thursday.

Talks on the budget are expected to continue throughout the veto recess, and neither Senate President Robert Stivers nor House Speaker Greg Stumbo said they wanted to be called back to the Capitol for a special session.

But neither seemed eager to budge from their final proposals.

The Senate’s offer included 4.5 percent cuts over the biennium for postsecondary education, no spending reductions for K-12 education or Learning and Results Services programs, nearly $1.3 billion for the state’s beleaguered public pension systems and a $250 million budget reserve trust fund while the House recommended additional 1 percent cuts in a number of government agencies, more than $1.1 billion for retirement plans, a $250 million “permanent pension fund” and funding for Work Ready Kentucky, last pegged at $25.3 million, according to House and Senate budget chairmen.

Democrats made clear that they see no need for spending cuts at state colleges and universities, citing data from the Kentucky Center for Economic Policy that estimated the proposed 9 percent cuts over the biennium would result in $1,098 more in tuition costs per year, on average. Tuition and fee increases are set by the Council on Postsecondary Education.

“We have a fundamental, really a bottom-line disagreement over public education and most particularly higher education, and we can’t resolve that problem, and until we can resolve that problem we can’t move forward,” Stumbo, D-Prestonsburg, said as some lawmakers and staffers filed out of the Capitol Annex conference room.

But Stivers, R-Manchester, argued that with $38 billion in unfunded liabilities and a distinction in Governing magazine this week as the state with the country’s worst public pension dilemma, every facet of Kentucky’s government stands to suffer if lawmakers don’t invest more in the struggling Kentucky Retirement Systems and Kentucky Teachers’ Retirement System.

“We think that, in the essence, would have helped public education and higher education to resolve that problem because as you need to understand, when the universities have to pay and make payroll and they have to have their contributions to the employee retirement systems, they have many employees in those systems,” Stivers said at a press conference in the Senate Republicans’ meeting room in the Annex.

“So the more we can put in there, the more it helps them as well.”

Jessica Ditto, Bevin’s spokeswoman, pointed back to comments the first-year governor made at a Capitol news conference on Wednesday, expressing his hope that a compromise can be reached within the next two weeks. The 2016 General Assembly is scheduled to adjourn sine die April 12.

Stumbo and Stivers differed on how budget negotiations could continue, with the House speaker calling for Bevin to contact Senate leaders “and give them some direction.”

“If he wants a budget, we’ve laid out a pretty good budget proposition for them, but there’s no reason to cut public education,” Stumbo said.

“There’s no reason to not fund the (Work Ready Kentucky) program, so if the governor wants to have a budget, I think he should intervene with the Senate, and I think that if he drops his request that public education be cut, then we can come to an accord.”

However, Stivers said it’s with him, not Bevin, that Stumbo will be bargaining.

“I think you look at the budget as the governor proposed it, the House budget, but then look at the Senate budget and how much difference there was between the Senate budget and the governor’s budget as proposed,” he said.

“Naturally we’re going to have input. We have input from House … Republican and Democrat members, but as I said a few minutes ago, this is a negotiation between the House and the Senate. I’m not going to try to bind the governor to anything because he has the institutional integrity of the executive branch, and I’m here to protect the institutional integrity of the legislative branch. That’s my job.”

House majority whip shut out of Bevin presser

The budget impasse came moments before a scheduled 11 a.m. Capitol press conference in which Bevin and other officials laid out how his administration plans to address issues with the newly launched Benefind system.

House Majority Whip Johnny Bell, D-Glasgow, told reporters Thursday that he tried to enter the press conference but was denied entry by one of Bevin’s staffers, who said the event was open only to credentialed media. He said he wanted to hear what the governor might say about the budget impasse in the news conference before he was rebuffed.

The Kentucky Democratic Party provided a video of Bell trying to get into the event as Bevin walked past, which can be viewed here:

“Evidently he either doesn’t know who I am or dislikes me,” Bell said during a second press conference in the House chamber Thursday. “I’ve never spoken to the individual, and he never looked my way, never spoke to me or anything else.”

Stumbo called on Bevin to apologize.

“I think that’s an atrocity,” he said. “I think the governor owes Rep. Bell an apology for that. He may have not been aware of it, and if he wasn’t, then so be it. But if he was and if he gave that order, I think it’s an affront to the people of the commonwealth that not only a citizen, but a legislator is denied access to a public press conference.”

Ditto issued an apology for the misunderstanding.

“Several individuals attempted to gain entry to a press briefing for credentialed press only,” she said in a statement. “Rep. Bell was not singled out. The governor’s staff is available to discuss this or any other issue with Rep. Bell and any other legislators.”

Bell is another House Democrat on the budget conference committee to say he’s never spoken with Bevin, as House Appropriations and Revenue Committee Chairman Rick Rand, D-Bedford, has said he’s never met the Republican governor.

Bevin has disputed Stumbo’s assertion that the governor has only met with him once and only to discuss four special House elections earlier this month, saying Wednesday that he and Stumbo have talked about the budget in groups and individually, including a meeting without staffers that lasted for more than half an hour.

Stivers was asked how many meetings he’s been in involving Bevin and Stumbo during budget negotiations.

“None,” he said. “But how many have I had with the speaker? As Damon (Thayer, the Senate majority floor leader) said, I didn’t keep a ledger, and how many I’ve had with the governor, didn’t keep a ledger. I mean, there’s been a bunch.”

Ditto did not immediately respond to a request for comment on Stivers’s remarks.

Kevin Wheatley

Kevin Wheatley is a reporter for Pure Politics. He joined cn|2 in September 2014 after five years at The State Journal in Frankfort, where he covered Kentucky government and politics. You can reach him at kevin.wheatley@charter.com or 502-792-1135 and follow him on Twitter at @KWheatley_cn2.

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