Education, pension funding threatens state budget


By Adam Beam - Associated Press



FRANKFORT (AP) — Kentucky lawmakers tussled over $300 million on Tuesday, with Democrats intent on spending it on public education while Republicans demanded it go to state retirees.

The money is just a small part of a budget proposal authorizing more than $65 billion in state spending over the next two years. But it represents a pair of warring campaign promises in an election year that could determine who controls the last legislative chamber in the South still run by Democrats.

Republicans have pledged to solve Kentucky’s public pension crisis, where a massive debt of more than $30 billion threatens the state’s finances if it is not addressed. Democrats have campaigned on protecting public education, including a program to give free community college tuition to all Kentucky high school graduates.

In a news conference Tuesday morning, Republican Gov. Matt Bevin said he and GOP leaders are willing to negotiate. He criticized Democratic House Speaker Stumbo for saying he did not think lawmakers would be able to agree on a budget proposal before the legislature adjourns for the year.

“We are not going into special session,” Bevin said. “There will be tremendous pain inflicted on the people of Kentucky if the speaker does not sit down and come up with a budget. It is up to him.”

Minutes later, Stumbo and House Democrats offered a compromise during a tense budget meeting before TV cameras. It would spend $350 million less on the retirement system than the Senate proposal. Instead, it would put $215 million back into the budgets of state colleges and universities. It would give $88 million back to K-12 and preschool programs.

It would restore $8.9 million in cuts to state constitutional offices like the Secretary of State, who handles state business filings, and the Attorney General who investigates and prosecutes crimes. It would transfer an extra $36.4 million to the state court system to address what Chief Justice John Minton said is a potentially crippling deficit. And it would spend $25 million on a program to give free community college tuition to Kentucky’s high school graduates.

“We think that this is a reasonable compromise,” Democratic budget chairman Rick Rand said. “It gives the governor what he wants, his contribution to the pension systems. … And it allows us to move education forward in this state.”

About an hour later, Republicans countered with a plan that included the $88 million for K-12 and preschool programs. But it would take $215 million from colleges and universities and give it to the state retirement system. Democrats quickly rejected that proposal.

“I want to know what impact this has on college tuition because that is in effect a tax increase to every Kentuckian who is sending their kids to college,” Stumbo said.

Senate President Pro Tem David Givens said Republicans don’t take the cuts lightly. But he said they are necessary in order to address the more than $30 billion debt the state owes to hundreds of thousands of retired workers and school teachers.

“We wish we didn’t have to face any challenges,” he said. “I think we all acknowledge we owe this money.”

Lawmakers also cannot agree on how to spend other, smaller parts of the budget, including $44 million in coal severance tax money that Democrats have proposed spending on golf courses and swimming pools in eastern Kentucky.

“If y’all think good policy is $100,000 in maintenance for a golf course two years in a row, if y’all can stand up and legitimately say that is good policy, I’ll believe it,” Republican Senate President Robert Stivers said.

Stumbo looked at Stivers for a moment and said: “It’s as good as policy as that swimming pool they named after you, if you want to get personal about it,” a reference to the Stivers Aquatic and Wellness Center in Barbourville.

The state legislature has two legislative days left to pass a budget. Lawmakers plan to meet again on April 11 and 12, but they can adjust the calendar as needed. If they pass a budget in April, by law they would not be able to override any of Bevin’s potential budget vetoes.

By Adam Beam

Associated Press

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