Senate budget will not raise taxes, Borders says

FRANKFORT -- The Senate version of the two-year spending plan for the state will not include any new taxes, Senate budget chairman Charlie Borders said today.

Borders also said the Senate plan will "be closer" to the lean budget offered by Democratic Gov. Steve Beshear than to the Democratic-led House plan.

Borders' comments came at the beginning of the Senate Appropriations and Revenue Committee that began at 9:10 a.m.

The Democratic-controlled House earlier this month approved a budget that raised the state cigarette tax from 30 cents a pack to 55 cents a pack and applied the state's 6 percent sales tax to a few services such as armored cars.

The Senate budget committee is expected to finish its work later today so the entire Senate can vote on it.

A conference committee made up of representatives from both the House and Senate will be formed to try to iron out the differences in the last days of this year’s legislative session.

UPDATE 9:42 a.m.: The Senate plan will provide a 1 percent pay hike each year for teachers. The House version offered a 1 percent increase in the first year of the budget and 3 percent the second year.

The spending plan provides an additional $1.8 million each year for drug courts and $2 million each year for Operation UNITE, a drug eradication program in Eastern Kentucky. That money comes out of the Governor's Office for Local Development.

UPDATE 10:05 a.m.: The Senate cut $2.5 million a year from funds used to administer the Medicaid program. The Department of Mental Health and Mental Retardation was reduced $3.4 million in fiscal year 2009 and $6 million in fiscal year 2010.

The revised budget includes language authorizing replacement of Eastern State Hospital, but eliminates funding to replace a state nursing facility for the mentally ill in Glasgow.

The cabinet's Department of Community Based Services was cut about $7 million over the biennium.

UPDATE 10:14 a.m.: The Senate takes about $43 million from the state Road Fund to fund the Kentucky state police.  The move is designed to generate more money for the state's General Fund, which pays for most programs.

The Senate plan also anticipates savings of $24 million a year by removing about 2,000 state inmates from county jails through other programs such as home incarceration.  They would be non-violent offenders.

There would be no state funding in the second year of the budget for the public defenders' office in Lexington under the Senate plan. Urban County Government would have to pick up the cost.

UPDATE 10:30 a.m.: The Senate restored 75 percent of the 12 percent cut Gov. Beshear proposed for the public universities and community colleges. In other words, the Senate is proposing a 3 percent cut -- about $30 million -- for those institutions, on top of the 3 percent that Beshear ordered in the current year.

The House, through a combination of new taxes and shifting around some money, had completely restored Beshear's proposed 12 percent for 2008-2010.

The Senate proposed $60 million for Bucks for Brains, a program the universities have used to attract prominent researchers to the commonwealth. That's the same amount Beshear proposed, but far less than the $115 million in the House budget.

The Kentucky Community and Technical College System got good news when the Senate proposed giving the system $9 million over the biennium for maintenance and operating funds for the 15 new buildings that are scheduled to open in 2008-2010. KCTCS officials had threatened  not to open the new facilities if the state does not give them the maintenance and operating funds. The House left out this money.

The Senate added money to all state scholarship programs, including $37.6 million over the next biennium for the Kentucky Education Excellence Scholarships (KEES), the state's largest scholarship program.

UPDATE 10:39 a.m.: The Senate removed $500 million in bond funding that had been added by the House to the Transportation Cabinet's budget. The House had funded the projects by making permanent an expected increase in the gasoline tax scheduled for later this year.

Overall, the Senate proposed $110 million of road bonds, compared to $550 million in the House budget.

UPDATE 10:45 a.m.: The Senate plan would provide $250 million for new K-12 school construction projects over the next two years, compared with $100 million in the House's budget.

Unlike the House, the Senate provided no money for expansion of a prison facility in Elliott County.

In total, the Senate's budget adds $129.8 million in new funding during fiscal year 2009 and $143.9 million in 2010. Most of that new money comes from the elimination of more than 3,000 state workers through attrition. The House's budget relied on about $400 million in additional revenue each year.

State employees would get the same raise as teachers: 1 percent each year of the biennium.

The Senate's budget cuts in half the amount of bonded projects paid for out of the General Fund. That means many of the construction projects vetoed two years ago by former Gov. Ernie Fletcher aren't funded. The House had restored funding for all of those projects.

One vetoed project that did survive is a new animal disease diagnostic center at the University of Kentucky's Coldstream Research Campus.

The Senate's debt capacity would be 6.27 percent of the budget.  That compares to 6.34 percent for the governor's plan and 6.56 percent for the House version.

The Senate plan provides $3.7 million for improvements at Bluegrass Station in rural Fayette County.

UPDATE 11:05 a.m.: Included in the Senate's budget is a tax rebate on military pay. Military members could apply for a refund of their state income tax, beginning later this year. The Senate appropriated $10 million to fund the program, but recent legislative estimates have suggested the program could cost $18 million a year.

UPDATE 11:15 a.m.  The Senate plan would also raise additional revenue from taking more money from the state lottery.

It expects $54.6 million in the first year and $55.6 million the second year from the lottery.

Borders said the lottery is supposed to give the state 35 percent of its proceeds but has not been doing that in recent years.

He noted that even with more money from the lottery for the state budget, the Senate plan would fully fund the KEES scholarships, which also rely on money from the lottery.

While the House raises $20 million a year from efficiency measures and debt service lapse, the Senate reaps $44.9 million in the first year and $58.9 million in the second year.

UPDATE 11:22 a.m.: The Senate budget provides no funding for the Fayette County public defender's office over the next two years. Funding for that agency would have to come from the Urban County Council.

It keeps $9 million for runway improvements at Blue Grass Airport.

The Senate budget committee adjourned shortly before noon.  Borders said it will vote on the executive branch budget after the Senate Transportation Committee meets during recess of today's Senate session and approves some budget issues.

Before adjourning, the Senate budget committee accepted the same legislative branch budget that the House approved.  It provides $10 extra million a year for the legislative branch.

UPDATE 3:25 p.m.:  Beshear said he wants to withhold comment on the Senate plan until he has had the chance to review it.

But he said he believes it will show "once it is fully revealed," that needs still are there for human services and education.

"My understanding is they didn't provide any new revenue," he said. 

Asked what his understanding is about the Eastern State project, Beshear said, "They propose doing it differently but I still think they feel the project is important enough to do it."

House Majority Caucus Chairman Charlie Hoffman, D-Georgetown, said he was glad the Senate budget contains contingency funding for a new community college and technical school in Georgetown.

That project, along with several other university buildings and an additional 2 percent raise for state workers, would be first in line for funding if the state collects more revenue than anticipated over the next two years.

Hoffman said the House budget provided water and sewer infrastructure for the new school.

"With Toyota and other manufacturing businesses in the area, there is need for a new college and technical school in Scott County," Hoffman said.

Sen. Damon Thayer, R-Georgetown, said it is "a very important project not only for Scott County but for Central Kentucky."

He said it is the No. 2  priority for the Kentucky Community and Technical College System and has support from local government, the Chamber of Commerce and Toyota.

The institution will focus on advanced manufacturing training, Thayer said, adding that it will be built in Lanes End Business Park across from Toyota.

House budget chairman Harry Moberly Jr., D-Richmond, said he has not had time to fully examine the Senate budget but believes the chamber "made a reasonable effort."

However, he said he does not like how the Senate plan handles teacher salaries.

House Speaker Jody Richards, D-Bowling Green, said he only had had time to read a synopsis of the Senate plan. He expressed hope that more money could be found for higher education and human services.

Richards also said the Senate appears too optimistic in its revenue forecasts.

Eastern Kentucky University President Doug Whitlock said he is grateful that the Senate plan reduces Beshear's proposed 12 percent cut in higher education to 3 percent.

"The worst-case scenario has been averted," Whitlock said.

Whitlock said it appeared to him that both chambers "have shown that higher education is a priority."

UPDATE 4:15 p.m.: The Senate budget committee has unanimously approved a revised version of the executive branch budget, which provides an additional $130 million to "fully fund" two proposed bridges over the Ohio River in Jefferson County.

Lawmakers found the additional money by cutting various federally-funded road projects across the state. About half the money comes from planned projects in Jefferson County. The rest is spread across the state.

The committee also approved a revised version of the judicial branch budget. The revised budget raises the minimum pay for deputy circuit court clerks and other non-elected staff to $22,000 a year. All other employees get a 1 percent raise each year of the biennium.

--Jack Brammer, Art Jester and John Stamper

Comments

[Masebrock]

Glad to see the Senate having a sound financial mind. With this recession, we're all going to have to plan for leaner times.

[Mansfield]

I have to say those were terrific updates. Thanks.

[Scooter]

I understand the state is in a financial disaray, which saddens me deeply. But I must confess my frustration's here. They are talking about 1% raises for all employees and teachers. While, I understand they have to tighten the belt, why not take away the 5 million for the horsepark modifications, and the arena's for both UK and the downtown Louisville area? If they have to tighten the budget, then that should mean all discretionary spending should be done away with. In addition, lets cut some of the 100's of non merit positions in Frankfort that pay 50k+ per yr. Seems to me, that if employees need to show restraint, then so should the politicians and do away with these positions. Let them and everyone else do a little more work. Seems to me this would be a good savings as well.

[Paula]

I have a very, very hard time trying to understand how senators and legislators can stand up and vote for teachers and state employees getting just a 1% raise for the next 2 yrs. Then they find money (20 million
for the next 2 yrs) to fund themselves. Idiots! a 1% percents raise goes nowhere when the cost of living (mainly insurance and gas) goes up so drastically. well fellas you get what you pay for. The incentative is gone. I used to love my job but now it is just a job. I think the last budget session we took a hit too. How long has it been since we got the 5%? Maybe it is time for new leadership across the state !!

[state worker]

WAKE UP!!!!
NOW IS THE TIME FOR US TO SPEAK OUT AND LET THEM KNOW THAT WE HAVE BEEN RAN OVER TIME AFTER TIME AFTER TIME. I'M SICK OF IT! STATE JOBS DON'T PAY ANYWHERE CLOSE TO THE PRIVATE SECTOR AND ALL WE HAVE GOT FOR OVER THE LAST HALF A DECADE IS CRAP! IF WE DON'T RALLY TOGETHER AND GO ON THE CAPITAL STEPS AND LET IT BE KNOWN THAT WE HAVE HAD ENOUGH THEN WE MIGHT AS WELL FOGET EVER SEEING ANOTHER 5%

[state employee]

I believe this will be going on 7 years since we got our last 5%. That is the longest stretch since the '70's.

[What?]

I think the legislature needs to cut their budget by the $10 million that they increased theirs by. They need to experience some cuts too.

[Duh?]

2007 election results show Franklin County and surrounding counties voted heavily for Beshear. Well, state employees you got what you voted for...the Senate Budget mirrors Beshear's when it comes to raises for state employees and now you're acting like the Senate Republicans were supposed to save you and make it all better...the same Senate Republicans whom you have no doubt bad mouthed for several years. If you don't like your raise or how things are going then I suggest you call your good friend Steve in Room 100 of the Capitol. The economic times haven't kept him from traveling to Nashville for a football game with about 10 of his friends, New York for a little shopping and dining out just before New Year's Eve, a trip to Washington DC to dine at the White House, and others. Bet those expenses tallied to a fair amount don't you? Think about that and the fact the wants casino gaming to pass so that his friends (Brereton Jones, Tracy Farmer, Bill Yung, others) can the state help they so desperately need according to him. Remember, the industry needs help to keep it in Kentucky. By the way state employees, while he's traveling to expensive locales and looking out for his millionaire friends listed above, enjoy the 1% raise-heck, go out and spend it all in one place-White Castle!

[State Employee II]

To DUH?:

I hate to correct you, but I must. Governor Beshear proposed 2% for state employees and the Senate proposed 1%. So the budgets are not the same.

I think most state employees would accept 2%, given the budget, but 1% is a slap in the face.

[Fletcher gave rank and file state workers more than Beshear]

http://kpac2.blogspot.com/2008/01/hey-state-workers-how-do-you-like-your.html

[State Employee II]

I could care less about your blog spot. Fletcher gave the lower paid workers more money and gave the higher paid employees practically nothing. This is nothing but age discrimination, since the majority of employees over 40 got little or nothing.

Are you proud that Fletcher once again broke the law?

[elephant man]

No New Taxes? Thanks Senate !!! We are a taxed to death in Lexington.

[Curry]

It is time for state employees to march on the Capitol just like the teachers did.

It's time to vote all the incumbents out of office.

State employees are crapped on by the legislators, governor (no matter the party), the citizens, and OURSELVES.

All the bitching and moaning will get us nowhere. Its time to organize the various employees groups across state government and march on the Capitol.

The Transportation Cabinet employee organization is sitting on a $200,000 pile of money and they are afraid to spen it for the benefit of the KYTC employees.

Charles Wells bailed on us for a $70,000 a yr job. No big loss here because he never did anything for us.

Its time to stop being sheep and caving in to politicians. Vote them all out.

[Curry]

A 1% bone thrown at us when at the same time the legislature (with the approval of your and my legislators and our governor) is going to reduce the workforce by over 3,000 staff. Guess who is going to pick up the extra workload.

It will be you and me who basically have not had a decent raise for over 5 years.

What I'm looking forward to is the citizens blaming and bad mouthing us for not providing the services that their tax dollars deserve.

Just like when your burger comes out wrong, you complain to the waitress when it is the cooks fault. We will take the blame for what the elected officials have done to the taxpayers.

[John]

to State Employee II,
State employees will take the 1% raise and smile all the way to White Castle because we are too scared to stand up for ourselves. But we will complain about any type of raise other than 5% but thats all we will do is complain.

We will take on the extra workload left by the 3,000 or more employees that will not be replaced. and we will complain about it but we will do the work.

WE will not stand up for future employees and the ridiculous retirement requirements that will be thrust upon them by the people we elected in office.

We as a group are limp noodles. But if you ask, I did voice my opinion and now am ostracized within state government, have been here too long to leave but I will never get another promotion because I am labeled a complainer.

Some advice points I will give you for any hope of future raises... tuck you tail between your legs and don't complain or disagree with upper management.

If you see a management mistake, don't say anything

If you see an employee getting mistreated by management, keep it to yourself.

If you see a program wasting taxpayer dollars, don't offer any words other than words of support.

If you see a more efficient way to complete a task, don't offer up your plan.

If you make a mistake, thank management for yelling at you and ask for a second helping.

Kiss your bosses rump, merit and non-merit, or you have absolutelty NO CHANCE of getting a raise.

Tell them how great they are and do it all the time.

Never disagree, always agree with management.

Most of all, act like the Dilbert comic characters, cowering in your cube and you will advance in state government.

And yes, I have a big chip on my shoulder because of all the incompetent "leaders" in state government regardless of the party in power.

[state worker]

A piece of budget text offered noted by Mark Hebert:

SENATE BUDGET REPORT - 2008 REGULAR SESSION OF THE GENERAL ASSEMBLY 3/22/08 2:38 pm
BUDGET MODIFICATION REPORT
GENERAL ADMINISTRATION
The Senate amends the State/Executive Branch Budget Bill, Part I, Operating Budget by adding the following language:
"State Motor Vehicle Fleet: The Secretary of the Finance and Administration Cabinet shall restrict permanently assigned vehicles to
only the Court of Justice, Executive Cabinet Secretaries, law enforcement, or for other public safety purposes. A report listing the
recipients of permanently assigned vehicles from the State Motor Vehicle Fleet shall be submitted to the Interim Joint Committee on
Appropriations and Revenue by August 1 of each fiscal year."

They will never see the report because of the incompetent leadership at Fleet Management. They had good leadership but he was fired. He looked out for the taxpayers. He saved tax dollars but he was fired.

Now there is a director with zero fleet management or vehicle experience. How he got there must have only been a political favor being returned. The division is in total disarray, it is micromanaged to the point everyone is trying to get out.

What happened to keeping good management in place regardless of party affiliation.

why doesn't someone list publically list all the people who drive state vehicles home and who sign off on it. in other words, who has approved all the people driving cars and trucks home each day.

[elephant man]

1% and the Gov. gave your blog time back on the job. Blog away for 3 and a half years. Be happy!!

[Philip]

John, eloquent post, and I do feel that you and your co-workers are getting a raw deal. And somehow, in spite of all those observations and comments, I believe that you still do your job well. As a taxpayer and fellow citizen, for what it is worth, I thank you!