No Kentucky budget possible until later this month

FRANKFORT, Ky. (AP) - Kentucky lawmakers left town Thursday amid
a budget impasse that clouded prospects for a spending plan, which
could come up in a wrap-up session later this month if House and
Senate negotiators can surmount their differences.
Face-to-face negotiations failed to resume one day after
weeklong, closed-door talks collapsed amid a conflict over some
debt-financed construction projects backed by the House.
"Everything's still in a state of flux," said Senate
Appropriations Committee Chairman Bob Leeper, a Paducah
Senate President David Williams and House Speaker Greg Stumbo
exchanged letters Thursday but no new round of talks were
In another development, the Senate offered a slightly new
version that included restoring some proposed cuts to education and
a proposal to help school districts replace dilapidated school
buildings if the districts make their own commitment through local
property taxes. Leeper said senators also were willing to accept
water and sewer projects sought by the House.
Lawmakers completed the 58th day of their 60-day session
Thursday. Their break extends until April 14, when they return for
a two-day wrap-up session.
That climactic session will determine whether lawmakers complete
their top task - passing a two-year state budget to take effect
July 1.
Until negotiations broke down, lawmakers had hoped to pass the
budget Friday - the last day they could vote on the spending plan
and still be able to override any possible gubernatorial vetoes.
Gov. Steve Beshear, who met Thursday with top House Democrats on
the stalled budget, said lawmakers have until April 15 to pass a
"balanced, responsible" spending plan.
Beshear said the "people of this state deserve no less."
Stumbo, D-Prestonsburg, said the exchange of letters was a
"positive sign," and said he was hopeful that "cooler heads will
prevail" toward a compromise.
"I still think that there's reason to be optimistic," Stumbo
told reporters. "I think we're going to get a budget."
Senate negotiators have balked at some House-passed construction
projects that would result in the state borrowing hundreds of
millions of additional dollars to finance the work. The bulk of the
bonded projects would replace dilapidated schools.
Stumbo has championed construction projects as a way to help
jump-start the economy. He said the proposal to build new schools
along with water and sewer projects would put an estimated 25,000
Kentuckians back to work amid high unemployment.
Both legislative leaders didn't back off their positions
Thursday about the sticking point.
"Our position is that we think a jobs bill is important to
Kentucky," Stumbo said, adding that the Senate's budget version
doesn't include a job-creation component.
Stumbo has said House Democrats are willing to compromise on the
size of the construction program.
Williams, R-Burkesville, continued to say the proposal would add
too much state debt in precarious economic times.
"We just believe that you cannot allow this state to continue
in a death-spiral of debt," he said.
Other sticking points have included education funding and a
House-passed revenue package.
The Senate passed a $17.3 billion two-year budget last month
that called for deeper spending cuts to almost all state agencies
than the House's $17.5 billion version.
On Thursday, the Senate voted in favor of a fresh proposed
budget that resembled the Senate's earlier version. The new
proposal would restore $25 million in funding for elementary and
secondary schools. House Democrats have spoken out against the
original Senate proposal that called for a 1½ percent cut in the
first year for the main state funding formula for elementary and
secondary schools, followed by a 1 percent in the second year.
Williams said the new offering was meant to move the process
forward. Stumbo wasn't biting, saying the budget would still need
to be hashed out by House and Senate negotiators.
Meanwhile, lawmakers gave final approval Thursday to the
judicial and legislative budgets.
The legislative budget includes $50.9 million in state general
funds in the first year of the biennium and $53.8 million in the
second year. The judicial budget contains $293 million in general
funds in the first year and $320 million in the second year.
Both budget bills included no pay raises for employees.
The budget legislation is House Bill 290.

(Copyright 2010 by The Associated Press. All Rights Reserved.)

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