FRANKFORT, Ky. (AP) - State regulatory officials say they're upset over the Kentucky General Assembly's plan to take millions that professionals pay in licensing fees and use it for other government expenses.
Doctors, nurses and dentists pay the fees for their licenses, and the move affects about 35 regulatory boards and commissions.
"It's pretty serious," said Charlotte Beason, the Kentucky Nursing Board's executive director."
Her agency would lose $2 million over the next two fiscal years. "We're going to have to make some serious cost-cutting decisions."
House Appropriations and Revenue chairman Harry Moberly didn't immediately return a call for comment Monday.
Kentucky lawmakers approved a two-year $19 billion state spending plan last week. The proposal is pending before Gov. Steve Beshear.
Economic forecasters have estimated the state is facing a $900 million budget shortfall over the two-year period beginning on July 1. That's on top of an estimated $434 million revenue shortfall in the current year that ends June 30.
Beshear had urged lawmakers to raise the state's tax on cigarettes as one way to increase revenue, but the legislature did not.
Licensing fees are supposed to help the regulatory agencies run their offices. Instead, the fees would go toward the state's budget under the plan approved by lawmakers.
The spending blueprint approved last week would transfer about $5.5 million in the current year ending June 30, $4.9 million the following year and about $760,000 the next year.
The spectrum of regulatory agencies in Kentucky, ranging from the Medical Licensure Board to smaller regulatory panels that watch optometrists or podiatrists will be affected.
Critics of the move say it could threaten public safety. Agency officials say they rely on the money generated from those fees to operate. The agencies are tasked with investigating complaints regarding alleged misconduct by professionals.
"Our job is to protect the public," said Abby Shapiro, a psychologist and chairman of the Board of Psychology Examiners. Shapiro's agency would lose about $90,000 this year and more than $100,000 the following year.
Oliver H. Barber Jr., a Louisville lawyer, said professionals who pay license fees are essentially being taxed again when the revenue is transferred to the state's general fund.
"The General Assembly and the executive branch enacted piecemeal taxes all over the place instead of stepping up to the plate and realizing they have to confront a lack of revenue," Barber said.
Dick Brown, a spokesman for Gov. Steve Beshear, said the legislature's proposal called for state government to transfer more from boards and commissions than the governor's budget proposal. Still, the governor is limited in his possible actions, Brown said.
"There is very little the administration can do to remedy this situation," Brown said. "Vetoing the fund transfers would unbalance the budget."
The legislation is House Bill 406.
Information from: The Courier-Journal, http://www.courier-journal.com
(Copyright 2008 by The Associated Press. All Rights Reserved.)