FRANKFORT, Ky. (WKYT) - The 7 justices first heard from Andy Beshear who says Bevin's budget reduction was simply unlawful.
"It's not about pensions. It never was. All parties agree. The money can't go there," said Beshear, the Democratic Attorney General.
Governor Bevin's attorney says Kentucky does face a pension liability of $35 billion and says the Governor and Attorney General don't agree on if Kentucky has a $52 million dollar surplus.
"You can argue that $52 million is a drop in the bucket compared to a $35 billion unfunded liability but we have to start somewhere," said Steve Pitt, counsel for Kentucky Governor Steve Bevin.
The nature of the arguments is this: the Attorney General says the power of the legislature is being limited by the Governor's actions. The Governor's side is that he has used his ability to spend less money.
The battle started last spring when the university budgets were cut, Beshear filed suit then a lower court ruled for Bevin. Now the Supreme Court is hearing the appeal.
"The court is the last stand before we have a situation where a Governor is free to cut 4.5 percent from any appropriation," said Pierce Whites, Counsel for the Kentucky House Speaker.
Justices heard arguments for nearly 2 hours, there's not timetable on when a decision will be made.
The $18 million affected by the budget cuts remains in escrow until the case is resolved.