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Ky. speaker says proposed budget won't raise taxes

FRANKFORT, Ky. (AP) - Kentucky House leaders presented a state
spending plan to their colleagues Thursday, saying the budget
blueprint avoids higher taxes while cutting university budgets and
rolling back two classroom days for kindergarten through high
House Speaker Greg Stumbo told reporters that the plan for the
next two years would protect Medicaid - the massive government
health plan for the poor and disabled - along with a key state
funding source for elementary and secondary schools.
"I think we've done what we set out to do," Stumbo said.
"We've protected our educational system. We've not done any harm
to our Medicaid system."
The plan would not raise salaries for teachers and state
employees, Stumbo said. Job cuts would be limited to more than 100
non-merit positions across the branches of government, taking the
number of political appointees back to 2007 levels, he said.
It calls for cuts in government contracts that would total about
$90 million, and seeks about $150 million in savings in state
health insurance plans over two years, he said.
Stumbo said the spending outline received a positive response
from rank-and-file House Democrats during a closed-door meeting
Thursday. House Republicans also received a briefing.
Stumbo, a Prestonsburg Democrat, said he hoped a budget bill
could pass the House in early March and then go to the
Republican-led Senate for its input.
The 60-day legislative session reached its halfway point
"I think you're going to see a very responsible budget that
comes out of this session," Stumbo said.
The plan was crafted by House leaders after lawmakers rejected
Gov. Steve Beshear's proposal to assume $780 million in new revenue
by allowing video slot machines at race tracks. Lawmakers have been
struggling to fill a shortfall exceeding $1 billion, caused by the
economic downturn.
The House leadership plan makes its own assumption - that
Congress will prolong the temporary boost in the federal
government's share of Medicaid costs in Kentucky for at least six
months. The higher federal match currently lasts only until the end
of the year. The extension would account for about $225 million of
the shortfall in the first year of the next budget.
Stumbo said the plan balances the budget in the first year, but
still has a shortfall of about $200 million in the second year. A
slight uptick in the economy would plug that gap, but state
agencies would be told to have contingency plans in case later cuts
are needed, he said.
The House leadership proposal calls for rolling back two
instructional days in Kentucky public schools that were added
previously by lawmakers in the state budget. Kentucky schools would
still have more instructional hours than almost all surrounding
states, Stumbo said.
Stumbo said cutting two school days would save about $34 million
each year. School districts could preserve the two days on their
calendars by dipping into reserves, Stumbo said.
Brad Hughes, spokesman for the Kentucky School Boards
Association, said the group would be "extremely disappointed"
with the loss of two classroom days. But he added, "From a plate
of bad choices, this is the least of the worst."
The House plan proposed a 2 percent cut in the first year for
public universities, and that cut would be continued into the
second year. But House leaders hope to find additional money for
the universities to help cover maintenance and operation costs,
Stumbo said.
"A lot of people believe that the universities have received
quite a bit of money during the last 10 to 12 years," the speaker
said in defending the cutback.
Earlier Thursday, University of Kentucky President Lee T. Todd
Jr. told a House budget subcommittee that another round of state
budget cuts could force layoffs, reduce scholarships and slow the
school's climb to becoming a top 20 research center.
Todd said he worried more cuts would deflate campus morale at a
time of rising optimism about achieving the goal of "top 20"
status among public research universities by 2020.
"We've got a culture now where people actually think we have a
shot at this, and I don't want to lose that," Todd told the panel.
At the same hearing, University of Louisville President James
Ramsey said previous budget cuts have hurt as UofL strives to
become a pre-eminent metropolitan research university.
"We don't have the money to continue to hire researchers," he
said. "We don't have the money to continue to hire faculty
members, to grow our enrollment."
The House leadership proposal also looks to offer state workers
a cheaper plan for health coverage that he said would still offer
essentially the same benefits. State employees could still choose a
more expensive plan, but would have to pay more for it.
The plan contains no Medicaid cuts, Stumbo said, but House
leaders are still looking at ways to squeeze savings from the
massive program without hurting services.
Among other things, the program's prescription drug program is
being scrutinized, he said. Medicaid provides health care coverage
for about 790,000 low-income and disabled Kentuckians.

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

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