In Depth: Kentucky Budget Impasse

by Rick Howlett on April 21, 2010

By Tony McVeigh, Kentucky Public Radio

On July 1st, if Kentucky is still without a state budget, a partial shutdown of state government will ensue. Non-essential services, like state parks, will close. Kentucky Public Radio’s Tony McVeigh looks back at how lawmakers got themselves into this predicament.

On January 5th, House Speaker Greg Stumbo gaveled open the 2010 session of the Kentucky General Assembly. The primary purpose of the 60-day session was to approve a new state budget, and on January 19th, Gov. Steve Beshear delivered his budget address to a joint session of the legislature. With Kentucky facing a deficit of a billion dollars or more, Beshear’s budget was based on new revenue from expanded gambling.

“It will provide a reliable source of income that we can use year, after year, after year,” said Beshear, “to strengthen our efforts to emerge from this recession, not shell-shocked and shattered, but ambitious and able.”

But video slots at horse tracks had failed in a bitter special session fight last summer, and legislative leaders weren’t anxious to tackle the issue anew. They ditched the governor’s budget and began crafting their own. Seven weeks later, the Democratically-controlled House voted 65-33 for a $17.5 billion spending plan that included more than $1 billion in bonded capital projects. House budget chairman Rick Rand outlined the measure on the floor.

“This budget is gonna embark on a construction program for schools, roads, bridges and water and sewer lines – infrastructure in this state – and we’re gonna put people back to work,” said Rand. “We’re gonna create jobs.”

That was March 10th. Two weeks later, the Republican-controlled Senate voted 35-2 for its own version of the budget, and the billion dollars in bonded capital projects were gone. House Speaker Greg Stumbo called the move a “budget breaker,” but Senate President David Williams sounded more optimistic as House and Senate budget negotiations got underway.

“I saw a lot of head nodding on both sides of the table about some things we did and some acceptance of the fact that some of these changes that we made were just because we really didn’t understand the position of the other side,” said Williams. “So, I thought we made a lot of progress.”

But the budget talks eventually broke down over the borrowing issue and the session took a 10-day veto recess. When lawmakers returned last Wednesday, there was optimism a budget agreement was still a possibility. But by Thursday, it was clear that was not going to happen, and the finger pointing began. Senate President David Williams.

“The session, as far as we’re concerned, is over,” said Williams. “The House refused to act upon a budget.”

House Speaker Greg Stumbo.

“There’s been a feeling all along that the Senate Republican leadership didn’t want a budget this session,” said Stumbo. “It took us 59-days to get to the truth of those facts.”

Calling the session “an abject failure,” Gov. Beshear chastised lawmakers for failing to meet their constitutional duty to pass a budget.

“I call upon the General Assembly to begin immediately working on a budget compromise,” said Beshear, “and continue working, until they’ve come to a successful and a responsible resolution – because I will call a special session in the month of May.”

And that’s where it stands. The next budget cycle begins July 1st, but Beshear wants a budget by June 1st because he needs time to restructure state debt. But if a budget agreement cannot be struck by then, Beshear will need the extra month to plan how he intends to run the state absent a biennial budget.

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