Ky. Senate budget writers propose spending cuts across much of state government

Ky. Senate budget writers propose spending cuts

FRANKFORT, Ky. — Kentucky Senate budget writers have put together a spending plan that includes cuts across much of state government and preserves two classroom days for kindergarten through high school that the House wants to drop, a key lawmaker said Monday.

It also cuts out plenty of construction projects from the House budget that would have piled up more state debt, said Senate Appropriations and Revenue Committee Chairman Bob Leeper.

Leeper said the Senate spending blueprint for the next two years features a nearly across-the-board cut of 1½ percent in the first year and a 1 percent reduction in the second year. A few parts of government would be spared the cuts, but he didn’t immediately identify them.

“We were wanting to share the sacrifice,” Leeper, a Paducah Independent, said in an interview. “We believe there are areas of efficiencies across state government.”

The committee was expected to take up the spending plan later Monday, Leeper said. The goal is to get the spending measure to a House-Senate conference committee as quickly as possible to let the conferees try to resolve the many differences in the two chambers’ versions, he said.

The Democratic-controlled House passed a $17.5 billion two-year budget plan earlier this month mostly along party lines.

The House relied on budget cuts and other steps, plus $371 million in revenue enhancements in the next two years, to plug a more than $1 billion shortfall looming over the next budget.

Now the Republican-led Senate is getting its crack at the budget.

Leeper said the Senate budget drafters decided to keep the two instructional days that the House proposed eliminating as a way to save $72 million in the biennium.

“I think it sends a better message, without question, for education,” Leeper said.

State Education Commissioner Terry Holliday has raised deep concerns about dropping school days when Kentucky is competing for federal education grants. Kentucky was listed recently among 16 finalists in the first round of the U.S. Department of Education’s “Race to the Top” competition, which will deliver $4.35 billion in school grants.

“The commissioner is concerned it would be a black mark on our status as a finalist if we cut instructional days to save money,” said Department of Education spokeswoman Lisa Gross.

The House budget funded more than $2.2 billion in school, water, sewer and other infrastructure projects in mostly Democratic districts. It calls for borrowing some $1.3 billion for construction projects, and plans to borrow an additional $800 million for roads and other projects with pots of money other than the General Fund.

Leeper said the Senate plan would have a much smaller debt ratio for the state. School construction projects were dropped in the proposal, he said, but the plan continues funding for debt service of some water and sewer projects passed in previous years.

Senate budget writers also decided to drop the two main tax-code changes proposed in the House’s revenue-enhancement measure, he said.

Both proposals have been opposed by business interests. One would temporarily suspend tax write-offs for businesses reporting losses. The other would accelerate collection of sales taxes. The House plan did not raise tax rates.

Senate budget writers continued their deliberations over the past weekend, and Leeper said that senators have been receiving briefings on the plan.

“It is a very responsible budget,” he said. “I think it maintains a lot of activities that folks feel are important.”

The legislation is House Bill 290.