Governor says he won't veto entire budget, mentions possible special session

UPDATED THROUGHOUT at 9:39 a.m.

Gov. Steve Beshear said Thursday afternoon that if Kentucky's revenue picture worsens, he will call state lawmakers into a special session to raise more money for its budget.

"It's bad enough as it is right now," he said to a group of reporters in the Capitol.  "If it gets a lot worse, to me, we have no alternative but to come together again and find ways of raising revenues to meet our obligations."

He expressed disappointment that state revenue figures for March will show a 6 percent reduction.

"We'll see in the next few months how things are going," he said.  "The national economy does not look good right now.  "Four dollars a gallon gasoline does not look good.  People are not spending their money because they are concerned about their own financial security, and I don't blame them.

"We'll see how the economy develops over the next few months.  That's going to be all important for the people of this state.  We've got to make sure we can deliver the essential services that government needs to deliver to our people."

Beshear said he would not hesitate to call a special session "either to make further reductions in that budget, which to me is untenable, or to raise some revenue so we can continue vital services to the people."

Earlier in the day, Beshear said he doesn't intend to veto the budget bill the General Assembly rushed to pass late Wednesday night. However, he added that he was just beginning to evaluate the document's details.

"At this point, no, I'm not thinking of vetoing the whole budget at all, but I am going to be looking at all the various parts of it to see what's in there and whether there are items that should be vetoed," he told reporters after speaking at the Lexington Forum meeting of business and civic leaders at Keeneland.

Beshear can cross out specific provisions or line items within the budget.

Because the House and Senate approved the $19 billion two-year spending plan before 12 a.m. Thursday, they could override any vetoes of it on the General Assembly's last day of work, April 15.

SOME BRIGHT SPOTS: In his remarks, he offered a brief critique of the budget, explaining that it makes some improvements over the initial draft he proposed by reducing cuts to universities, for instance. He conceded that his first version was a "very austere budget."

"Not many people liked it. I didn't either," he said.

Overall, he said the tight times will force him to run government more efficiently. "This is a bright spot in a tough situation -- that we're going to manage ourselves better," he said.

Beshear also praised it for including a deal brokered by Rep. Jimmie Lee, D-Elizabethtown, that would move Eastern State Hospital to the University's Coldstream Research Campus and allow the Bluegrass Community and Technical College to move into the mental health facilities former campus.

Also among the highlights, he said, was the $9 million for the Blue Grass Airport runway expansion and $60 million for the Bucks for Brains program, which is used to attract high-profile professors.

SOME NOT-SO-BRIGHT SPOTS: Beshear, during his remarks, cited several of the cuts as major disappointments.

"What are some of those painful parts? Well health services: that area is going to have some significant pain because there's just not enough money to be able to increase the kinds of services that some of our folks need," he said.

He also noted that teachers are slated to get 1 percent raises the first year and "maybe 1 percent raise the second year depending upon the revenues that come in."

NO NEW REVENUE: Beshear did lay blame for some remaining cuts in the "very tight budget" passed Wednesday night at the feet of the Republican-controlled Senate.

"The main problem with this budget is that there's not enough revenue, as we all know," he said. "I, myself, proposed two different sources of additional revenue. The House of Representatives proposed additional revenue and the majority in the Senate basically refused to produce any significant new revenue. And so we're where we are in this budget."

The governor had pushed for casino gambling as a way to generate more state income, but that plan died in the House. He later decided to advocate for a 70-cent increase in taxes on packs of cigarettes. But the House had already put together a revenue package that included several levies on services such as armored car and limousine transportation and a 25-cent cigarette tax increase, which moved the rate to 55 cents per pack.

"We're going to take it, overall, and manage state government in as an efficient a way as we can and we're going to manage to deliver the services that need to be delivered with the number of people that we have," he added.

REVIEWING PROJECTS: Beshear also said he will review a companion bill to the budget that includes a list of construction projects. That measure was the result of a deal brokered between House and Senate leaders late Tuesday and early Wednesday and served as an enticement for many rural House lawmakers to vote for the budget.

"We're just at the point now of getting to review the whole matter, and we'll take a look at everything and make a decision over the next 10 days," he said. "I'm assuming that enough legislators got together and felt like they wanted to supplement the budget in that way and it's going to be my job now to take it and review it and see what's in there and what should be done."

DYSFUNCTIONAL PROCESS: During his 25-minute remarks to the Lexington Forum, Beshear repeatedly referred to the legislative process as "dysfunctional."

"Don't underestimate that, folks," he told the group of about 80 local leaders. He said lawmakers are frequently engaging in "very rank partisanship."

"Most of the time has been spent on that kind of think instead of moving the state forward," he said.

He later told reporters that he specifically objected to the last-minute cramming to which lawmakers resorted, as they worked 21 straight hours Monday through Tuesday morning to finalize the spending plan.

"The budget should be put together in an orderly manner and with thought. And while I think a lot of thought has been put into this, obviously it was put together at the last minute like most of the budgets have been in the last few years," he said. "There's certainly a better way of doing that than bringing it all down to the last few minutes of the legislative session and I would hope that as we move into the future we would be a little more thoughtful in terms of using the time wiser in a session to consider a budget."

FOR COVERAGE OF THE STATE BUDGET FROM WEDNESDAY'S HERALD-LEADER, CLICK HERE, HERE AND HERE.

- Ryan Alessi and Jack Brammer

Comments

[Flamecat]

I do hope the Governor takes a serious look at this budget, but the problem is that he still wishes he could tax his way to a budget, which fixes no problems and is funny money in its own right.

[Frustated]

Raise Taxes so we can spend more money... Typical...

[WeNeedRevenue]

Not raising taxes so we can spend more, raising taxes so we don't have to borrow money to pay for what we need.

It's called fiscal responsibility, and the GA needs to get some.

[tighten your belts]

We do not need additional revenue, we need to spend less.

[RandomStateWorker]

Spend less? Education and health costs rise every single year and yet they get cuts in their budget. The dollar is down and inflation is up, yet the very teacher and employees who provide the necessary services to the state get a 1% raise this year and a "maybe" for next year. How does "spend less" add up for these conditions?

I sincerely hope that Beshear vetoes this mess and puts them back to work passing the tobacco tax so that, at the very least, K-12 EDUCATION (where KY woefully lags behind other states) gets the full funding it deserves.

[NotAStateEmployee]

Giving teachers a 1 percent raise (WAY below inflation) and maybe nothing in two years is embarrasing, especially considering how badly we lag behind the rest of the country in public education. This will only encourage public school teachers to move to private schools (which currently pay less than public, but will quickly pass it if public continues at 1% raises or less), or will look outside the state.

Just embarrasing. I smoke and I would welcome a heavy tax increase on cigarettes to support our state.

[Philip]

I can think of no good reason NOT to raise the cigarette tax a modest amount. As has been pointed out before, Kentucky's cigarette tax is among the lowest in the nation, and far lower than any adjoining state. The added benefit is perhaps discouraging teen smoking and decreasing healthcare costs.

I cannot help but believe that if Gov. Beshear had not pursued the fool's gold of gambling, and had instead sought a consensus on this one source of revenue, that he would have succeeded. It is the governor who proposes the budget, and the entire process began far too late in the session.

As a further note, I admire the Republicans opposition to increasing the tax burden. However, to arbitrarily refuse to consider ANY tax changes, especially the "sin" taxes, IMO, is being unrealistic and too inflexible.

[Elizabeth]

Amen, Philip!

[Dana]

I have always supported my legislator and my
senator also but it is time to face facts. None of those people wanted taxes because it would hurt them in their next election. These people were voted in to support the needs of Kentucky and its citizens not to worry about their own popularity. I don't really understand the position they have taken. Where did common sense go? Any kind of tax on cigarettes to help the budget would have been better than no tax and I am a smoker. Or a penny on every dollar...anything!!! I am so disappointed in our leadership in Frankfort. And then the big laugh comes when they send out things asking for money to 'SUPPORT" them as candidates. Well that won't happen for me
anymore because I think they all have failed. Now I am just waiting to see if Governer Beshear will "go with the flow" also. Most state workers and teachers will not make enough to support any candidate financially and which one of them would have the ..well whatever it takes to ask if you get my drift.

[Walt]

Is it April already? Gotta drum up support for yet another special session. Wish we could return the bi-annual sessions. If they can't get it done during a regular session, they should surrender their offices.