Deal struck on $21B budget early Thursday; lawmakers say agreement blends Senate, House priorities

04/14/2016 05:22 AM

FRANKFORT — Lawmakers have reached an agreement on a $21 billion biennial spending plan after spending several hours negotiating behind closed doors on Wednesday and into Thursday.

The General Assembly will vote on the final legislative version of the budget Friday, the last day of the 60-day session. Legislative Research Commission staff has said they need 36 hours to print copies of the budget, which would put the agreement in play around 3 p.m.

Details were scant initially as Senate President Robert Stivers, R-Manchester, said he would like to brief respective House and Senate caucuses after conference committee talks wrapped around 3 a.m. Thursday, but he and other legislative leaders addressed a number of aspects of the two-year spending plan when pressed by reporters.

House Speaker Greg Stumbo, D-Prestonsburg, said the budget represents “an adequate and effective blend, I believe, of the priorities contained in both the governor’s recommendation, the House budget and the Senate budget.”

Stivers agreed, saying the spending plan “sets forth the priorities of both chambers with some input from the executive branch.”

Gov. Matt Bevin’s office, in a statement, congratulated the conference committee on hammering out an agreement.

“For the first time in decades, we can say that Kentucky is investing in our pension system in a meaningful way,” the statement read. “We look forward to reviewing the details of the compromise and its final passage.”

Here are some pieces of the budget, according to legislative leaders on the conference committee:

  • More than $1 billion for the state’s beleaguered public pension systems
  • 4.5 percent cuts for higher education in the biennium, with Kentucky State University exempt
  • 4.5 percent cuts for constitutional offices in the biennium, with constitutional duties exempt
  • 9 percent cuts across many state government agencies in the biennium
  • Maintains current funding for Learning and Results Services, with K-12 programs also exempt from cuts in the biennium
  • About $25 million for a Work Ready Kentucky scholarship program for schools that offer associate degrees, with a 2.5 grade-point average and other requirements
  • A component of performance-based funding for postsecondary institutions in the second year of the biennium, which will represent less than 25 percent of their funding.

“It’s sufficient enough to, I think, ensure that performance-based funding will be something that the universities will have to adhere to in the future,” Stumbo said.

  • About 60 percent of coal severance dollars will return to coal-producing counties, up from the current 50 percent. Stumbo credited Stivers for helping “bring, I think, equitable conclusion about how to address some of the long-term problems that we know exist in eastern Kentucky.”
  • A permanent pension fund created after an audit of the retirement agencies. Stivers said it would be difficult to predict the account’s balance “because there’s components of the lapse monies that go into it.”
  • A workforce development bond pool with specific criteria
  • An increased filing fee for executive branch lobbyists, currently at $125.

Stivers said the compromise is higher than $275, although he declined to elaborate. During a March 23 floor debate on the budget, Sen. Chris McDaniel, R-Taylor Mill, had discussed raising the registration fee on executive branch lobbyists to $500.

  • Pay raises for Kentucky State Police

Lawmakers did not address Bevin’s call for spending cuts in the current fiscal year with the issue of the governor’s mandated 4.5 percent cuts to the final quarterly allotments for state colleges and universities in litigation. Attorney General Andy Beshear sued Bevin on Monday, arguing the governor can only order spending reductions when faced with revenue shortfalls.

“We wanted to wait and see what the results of the litigation were,” Stumbo said.

The compromise also includes language that would authorize $60 million in bonds to expand the Lexington Convention Center with a caveat: the General Assembly must pass House Bill 441, which would allow the Lexington-Fayette Urban County Government to increase its 6-cent hotel tax 2.5 cents.

The Senate carved the project from its version of the budget, and Stivers gave HB 441, which passed the House on a 77-13 vote, bleak prospects in the upper chamber.

“I don’t think there’s sufficient enough votes in the Senate to pass it,” he said.

Stivers said lawmakers had not discussed with Bevin sparing the budget from the governor’s veto pen. Bevin can line-item veto spending bills, and lawmakers cannot override his vetoes with sine die adjournment on Friday.

“I’m not recommending him to line-item or not line-item,” Stivers said. “That’s his job. That’s the executive branch function that he is guaranteed by the Constitution.”

Stumbo said he agreed that Bevin has the right to veto parts of the budget, but he “would be surprised if (Bevin) has a lot of objections to what’s contained therein” given the amount of effort and compromise put into the proposal.

“But who knows?” he asked. “I don’t know.”

Budget work isn’t quite finished for lawmakers. Stivers said negotiations on the biennial road plan will continue Thursday.

Correction: A previous version of this report indicated that many state government agencies would be cut by 4.5 percent. That amount is actually 9 percent.


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