Budget negotiations: Day 4

UPDATED THROUGHOUT THE DAY

FRANKFORT -- The president of the Kentucky Lottery Corp. met privately with several state lawmakers Friday afternoon regarding a Senate proposal that would require the lottery to provide more money to the state.

Arch Gleason met with the lawmakers behind closed doors in Senate President David Williams' Capitol office.

The Senate has approved a state budget that would take an additional $110 million over the next two years from the lottery to bolster the anemic state budget. That would raise the lottery's contribution from 27 percent to 35 percent of its sales.

A House-Senate budget conference committee, which is trying to iron out differences between the two chambers' budgets, decided Thursday night to contact Gleason about the Senate proposal.

Gleason said after Friday's meeting that he told lawmakers the Senate's plan would mean lower lottery prizes and less ticket sales.

He said the lottery now provides about $200 million a year to the state.

Williams declined to comment on Gleason's discussion. He said he was headed to the Capitol Annex to attend another meeting of the House-Senate budget negotiations.

UPDATE 4:40 p.m.: The budget conference committee began its fourth day of negotiations at 4:25 p.m.

Rep. Robin Webb, D-Grayson, informed the group about the discussion with Gleason.

Williams presented a document showing how much money neighboring states receive from their lotteries.

They ranged from 33.3 percent in Virginia to 26.5 percent in Indiana.  Williams said he did not consider West Virginia because that state has slots machines.

He said the average percentage return for the neighboring states was 30.1.  "I don't see why we couldn't do what neighboring states do," Williams said.

He said for every percentage increase, Kentucky could reap $7 million. 

A jump to the neighboring states' average, he said, would raise about $21 million a year for Kentucky, Williams said.

House Speaker Pro Tem Larry Clark, D-Louisville, said he was "not comfortable with taking money from the lottery at this time."

Another way of raising money for the state is the House plan to generate $150 million a year by restructuring state debt.

Williams said the Senate does not favor that move.

Earlier in the day, House Speaker Jody Richards, D-Bowling Green, said there is little hope for new revenue from a cigarette tax increase.

He echoed what House budget chairman Harry Moberly Jr., D-Richmond, had said Thursday.

The House plan raises about $230 million over two years from increasing the cigarette tax by 25 cents a pack.  The Senate did not raise any taxes.

Gov. Steve Beshear said Friday, "I'm still hopeful they will come around on the cigarette tax. ... From what I heard last night, the Senate is saying it's off the table.

"I don't think the House is saying that yet. But we'll see; obviously there is still a long way to go."

Concerning more money from the lottery, Beshear said that if the lottery says it can produce more "hard dollars" then that's acceptable to him.

Senate Majority Leader Dan Kelly, R-Springfield, said if the two chambers cannot agree on additional revenue measures, "then we will have to start cutting."

UPDATE 9:45 p.m.: The conference broke up, with both sides leaving the meeting room to go upstairs in the Capitol Annex to their offices.

It was not certain if they would reconvene this evening, but a staffer said it was doubtful.

The staffer said breakfast was ordered for the budget negotiations to resume at 9 a.m. Saturday.

UPDATE 11:32 p.m.  House Speaker Jody Richards, D-Bowling Green, said late Friday night that the House-Senate budget negotiators will reconvene at 4 p.m. Saturday and that he expects "a scaled-down budget" with little extra money.

He also said he expects the budget conferees to reach an agreement so the full House and Senate can vote on their work on Tuesday.

The legislature then would adjourn until April 14 and 15 to consider any vetoes by the governor, he said.

--Jack Brammer

Comments

[Bluegrassriver]

Figure this one. The conservatives want no casino gambling in Kentucky but now make a strong call for more lottery gambling? Does anyone see the contradiction in logic? Will the Family Foundation rail against more gambling of this nature? If they want to be honest with us they would.

[State Employee]

I would like to know how even after 3,400 state employees (some very highly compensated) retire this year, the state is in such financial disarray that they are still talking about forced layoffs.

And what about the legislature's budget increasing by 5%? Are they too good for budget cuts?

What happened to this great economy we kept hearing about from Bush and Fletcher. If it was so good, then why is state government having to scale back so much.

[Elizabeth]

State employee: Try reading major newspapers and you'll see that state revenues are tanking all across the nation.

Our economy is tied to oil and, historically, and steep rises in oil prices are followed by economic slowdowns about 6 months later. By last summer the indicators were all heading downward. Downturns mean less revenue and higher costs for states, especially in Medicaid. Crime goes up, families disintegrate, and property taxes go down as homes bring less on the market. It's not pretty and it is complex.

Blame Bush, the oil & energy monopolies, the banks & credit card companies, pretatory lenders, Congress for allowing outsourcing of jobs and importation of cheap labour. And blame McConnell for helping set up China as our major goods producer and our major lender.

Fletcher really had nothing to do with it. It's a national trend. A good governor will build a strong, diverse economy to help offset downturns but the complexity of finanical "paper" makes our lives global. Lots of people are shocked to find that their mortgage paper is actually owned by some bank in Germany or Citigroup is owned by the Saudi's.

State employees (and teachers) tend to be too insular. Life is very hard for most people.

[State Employee]

Don't get me wrong, I know life is hard for a lot of people and I know I am lucky to have the job I have. I am glad I joined state government. I'm not the type that would enjoy being "owned" by my employers. I also like that I pretty much have set hours. That is not to say I am lazy (as some people think all state workers are). I just enjoy having a life after work. For the time I am at work, I work hard for the taxpayers and my evaluations reflect that. I know that I could make a lot more money in the private sector, but to me it is just not worth it.

It just gets frustrating when I see all state workers being lumped together by the public as being lazy. There are a lot of hardworking state employees out there. Most people just hear about the bad ones though.

[Layoffs? Hardly...]

State Employee @ 9:23 yesterday, there will be no forced layoffs. Repeat, NO forced layoffs.

If they do lay anyone off, there will be more personnel actions filed than there would have been if Fletcher had stayed governor for 20 years.

The Brown administration claimed their political firings were layoffs mandated by budgetary concerns and Brown was slapped back to Cave Hill when all the court cases were over with.

Beshear's a dumb@$$ but he's not so dumb as to open his administration up to the same kind of stuff that Fletcher was accused of.

Layoffs. Won't happen. Don't hold your breath waiting for them.