Kentucky Governor Steve Beshear (at left in photo, greeting House Speaker Greg Stumbo) delivered his second annual State of the Commonwealth address Wednesday to a joint session of the General Assembly.
With the state still recovering from a deadly ice storm and facing an almost $460 million budget shortfall, Governor Beshear sounded a somber tone during his 33-minute address. He opened with praise for local, state and federal emergency personnel still working hard to help Kentuckians recover from one of the worst natural disasters in state history.
“For all those workers, from the National Guard, to our public health nurses, to our road crews, to all, who in ways big and small have worked to reduce suffering caused by these storms, I ask you to again rise and give them the ovation they deserve,” he said.
Turning to the state’s budget crisis, Beshear told lawmakers Kentuckians are tired of excuses. “They want answers and they need help. Yes, these are tough times. We gather for this, the 2009 session of the Kentucky General Assembly, confronted with a harsh reality: By June 30, we must fill a 456-million hole in the state budget.”
He says the administration is doing its part:
“Just like families, we have hacked away at expenses. We’ve shrunk the state workforce by two thousand employees. We’ve cut travel. We’ve reduced administrative costs by restructuring. The people want a leaner government and we’re giving it to them.”
Beshear says the administration has already trimmed government spending by $430 million this fiscal year. But he fears further cuts will put the state in a downward spiral. To avoid that, the governor believes the state needs new revenue.
“Kentuckians are not anti-tax. They are anti-unnecessary taxes. Kentuckians aren’t anti-spending. They are anti-wasted spending,” he told lawmakers.
And what does Beshear have in mind? A 70-cent increase in the state’s 30-cent cigarette tax, which the governor says will not only raise more money, but improve Kentuckians’ health. “A federal report named Kentucky number one. But it’s number one in deaths related to smoking,” he said.
After calling for bipartisanship in the search for answers to the budget crisis, Beshear closed the speech by highlighting some of the administration’s current and future goals. Among them…reforming the Kentucky Education Reform Act, taking a new look at nuclear energy and reining-in state prison costs.
But how was the speech received? Did he convince Republicans, like Senator Damon Thayer of the need for a cigarette tax hike? “My position on the cigarette tax hasn’t changed. I don’t think we should be raising taxes in the teeth of a bad economy. I think the result could actually make the economy worse,” Thayer said.
Former House budget chairman Harry Moberly says it was a pretty good speech, but he doubts Beshear will get what he’s seeking on the cigarette tax. “Seventy cents on cigarettes can’t pass. And 30-to-35 isn’t going to make much of a dent on the budget deficit,” he said.
House Speaker Greg Stumbo also doubts the governor will get 70-cents, but says a combination of cigarette and alcohol tax hikes might fly. “Our members have asked us to get the information about what effect that would have and get some numbers together as to how you might be able to blend a package together of revenue,” Stumbo said.
With the governor’s speech behind them, lawmakers now have 24 days to solve the state’s budget crisis before adjournment of the 2009 legislative session. This week, House and Senate leaders agreed new revenue is needed. Now they must decide what form it will take and how much money to generate.
(Photo Courtesy of Kentucky Legislative Research Commission)