Ky. Lawmakers Preparing For "Bare-Bones Budget"

FRANKFORT, Ky. (AP) - Kentucky lawmakers were making preparations Friday for a "bare-bones budget" to carry state government through the next two years as they continue to squabble over proposed revenue-generating ideas.

House and Senate lawmakers negotiating a new two-year approximately $19 billion state spending blueprint were split over a proposal to raise Kentucky's cigarette tax by a quarter. They also did not agree on a House plan to restructure the state's debt and a Senate proposal to collect more revenue from the state lottery.

"At the moment we're working on a very reduced revenue picture," House Appropriations and Revenue Committee chairman Harry Moberly, D-Richmond, said. "And, we'll have a very bare bones budget, it appears at this point."

Kentucky is facing a $900 million revenue shortfall over the next two fiscal years due to sagging revenues and soaring costs.

Gov. Steve Beshear's proposal called for significant cuts throughout state government; it would have cut funding by 12 percent for public universities and various government agencies and programs. Beshear later endorsed a cigarette tax hike of 70 cents a pack, and called for using revenue to finance hundreds of millions in bonds.

The Democrat-controlled House also proposed restructuring the state's debt as a way to generate up to $300 million over the next two years. The Senate disagreed.

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