Battle Brewing Over Special Session

by Gabe Bullard on June 1, 2009

From Kentucky Public Radio’s Tony McVeigh

A battle royal could be brewing between Kentucky Senate leaders and Governor Steve Beshear over the need for a special session on the state budget.

On Friday, after lengthy analysis of current and projected state revenue collections, the Consensus Forecasting Group predicted an almost $1 billion revenue shortfall for Kentucky in the next fiscal year.  Group chairman Larry Lynch says the panel had three forecast options: cfg4optimistic, control or pessimistic.  They went with a blend of control and pessimistic.

“Some argued 50/50,” said Lynch.  “There was one 75/25, one 25/75, so it was pretty much the consensus feeling that we’re not as optimistic as the control forecast would suggest.”

Bottom line, the panel of economic experts that advises the governor and legislative leaders believes the state’s facing a $996 million general fund deficit and a $239 million road fund shortfall in the fiscal year beginning July 1st.  It’s the biggest deficit in recent Kentucky history says Dr. Lynch.

“Probably in dollars,” said Lynch.  “I don’t know about percentage.  It was a lot worse back in ’82, I think.  Percentage-wise, it was like 10%, or something.  But that was a whole different environment.  Well, the recession was similar, but there was inflation going on at the same time.  It’s probably the biggest dollar amount in the last couple of decades, anyway.”

Immediately after the meeting, Governor Beshear issued a statement indicating plans to call a special session for June 15th to address the deficit.  He says in the next few days he will issue the official call and announce his budget proposal for the General Assembly’s consideration.  House Speaker Greg Stumbo issued a statement indicating a willingness to go along with the special session plan.  But that’s not the case with Senate President David Williams.  For one thing, he sees the deficit differently.  He says it doesn’t look as bad if you compare the revised revenue forecast for fiscal 2010 with the revised forecast for fiscal 2009.

“It’s my position that we don’t have a 10% shortfall of $996 million,” said Williams.  “We have a $129.9 million shortfall, which is 1.5% less than we had available last year.”

And that, says Williams, is manageable.  Furthermore, he says there’s no agreement between House and Senate leaders, and the governor, on ways to resolve the deficit.

“I feel very confident that we have a manageable situation and to spend $60,000 a day, $300,000 a week, for who knows how many weeks, to come up here when this interpretation is a reasonable interpretation and could avoid the necessity of a special session.”

But Williams says he and the governor have talked by phone about the budget crunch, which jibes with a comment the governor made earlier in the week about wanting an agreement before officially calling the session.

“I’m going to be working with Senator Williams, Speaker Stumbo and other members of the House and Senate to come up and fashion a solution to our budget problems,” said Beshear.  “And we’ll have a lot of discussions between now and the time that we come to some agreement.  But I’m going to seek common ground with the leadership in the House and Senate and I feel like that we’ll find that common ground.”

That remains to be seen.  Along with what actually will be on the call of the special session.  Will it include video slots at the horse tracks as a new source of state revenue?  The governor’s office isn’t talking, but Senate President David Williams is.  He says he doesn’t buy the revenue numbers being tossed around by supporters of expanded gambling, and soon will have more to say on that issue and the special session.

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