KY lawmakers' past decisions haunt them in the upcoming budget session as bills come due

12/04/2011 10:49 PM

The next two-year budget will have “less money than we have needs” partially because legislators have pushed back bills that are now coming due, said Democratic Rep. Rick Rand, the House budget committee chairman.

Rand declined to say whether he believed the next fiscal year that begins July 1, 2012 will have a $337 million shortfall as his Senate counterpart, Sen. Bob Leeper has suggested.

But Rand, of Bedford, said it’s undeniable that Kentucky’s next budget will be “difficult.”

“Even though we are experiencing a little more revenue, you have to understand that every General Assembly makes commitments for future General Assemblies, in terms of retirement benefits,” he said at the 7:00 mark.

He mentioned other issues, including state employee health insurance, restructuring of debt the General Assembly has pushed back and bond payments.

“We didn’t borrow more money, but we pushed the payments,” Rand said.

For the first six minutes of the interview, Rand discusses the current fiscal year budget.

Gov. Steve Beshear’s administration is proposing 2 percent cuts to certain agencies in order to help close a nearly $190 million gap in the current fiscal year, which ends June 30.

“I felt that the would probably do some of that because there was really no way for them to go in and balance the additional we had required for them without them doing that,” Rand said (1:54). “I’m anxious to see exactly how it would impact the agencies.”

Education, public universities, Medicaid, behavioral health and the corrections department are among the agencies that are exempt from this round of 2 percent cuts. Specifically, agencies such as the office of mine safety and the Kentucky State Police will not be exempt from the cuts.

But Rand said some of those agencies like the office of mine safety have been allowed to charge higher fees to help cover budget costs. Others, such as state police, have been exempt in the past but not this time.

“We will be looking at all of those to try to make sure any cuts we make in the future — and I believe there will have to be made in the future — that we do them as judiciously as possible,” Rand said (5:00)

Rand said part of the $57.9 million savings to help balance the budget will come from “debt lapse savings” that is partially because the interest rates on borrowed money are around 4 percent — well below what was initially estimated (1:30 of the video).

(Programming Note: Rep. Rick Rand answers questions about what the General Assembly can do to address some of the long-term financial challenges, including changes to the state employee pension system, Monday night on Pure Politics. That’s 7 p.m./6 Central and again at 11:30/10:30 Central on Insight’s cn|2).


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