House proposes adding $41 million in spending to state budget; source of money is unclear

jcheves@herald-leader.comMarch 10, 2014 

The Kentucky State Capitol building in Frankfort.

SAM RICHE — Lexington Herald-Leader Buy Photo

FRANKFORT — Lawmakers tried to placate various groups ahead of a vote expected Tuesday by the House budget committee on the state's $20.3 billion, two-year spending plan.

As unveiled Monday at a committee hearing, the House version of Gov. Steve Beshear's austere budget proposal offers tens of millions of additional dollars for state parks, courts, prosecutors, social-welfare programs, litter removal, schools, addiction treatment and the legislature's own budget. But it doesn't raise taxes or tap the state's "rainy day" reserve fund, and it adds only a few million dollars to the $1.9 billion in new debt that Beshear recommended in January, lawmakers said.

Much of the "additional" money was contained in Beshear's proposal for general purposes, but the House version gives him specific instructions on how to spend it, said House budget chairman Rick Rand, D-Bedford.

The House would add about $41 million in new spending, although Rand declined to explain where that money would come from.

"We'll roll all of that out tomorrow," Rand said after the hearing.

There also are a few minor cuts on top of those that Beshear proposed.

Overall, Beshear's version of the budget would boost funding for K-12 schools by $189 million; give state workers their first pay raises in four years; and fully fund the required contributions to the struggling state pension system. To help fund those increases, it would cut nearly $100 million from much of the rest of state government, including state universities.

Beshear's office had no immediate comment Monday on the House recommendations.

After the House budget committee votes Tuesday, the full Democratic-led House is expected to vote on the plan Wednesday and send it to the Republican-led Senate. The legislature must adopt a state budget and adjourn by April 15.

Among the changes in the House version:

■ An extra $33.8 million over two years for the budgets of county property valuation administrators. Beshear proposed cutting most of this money from the PVAs and allowing them to compensate themselves for the loss by charging fees to local taxing districts, such as libraries, fire departments and health departments. The taxing districts lobbied lawmakers to prevent that, Rand said. It's unclear where the House is getting most of this money.

Under Beshear's proposal, the Warren County Public Library faced an annual PVA fee of $292,000, which could have doomed its plan to open a larger branch library at a public housing complex, library director Lisa Rice said.

"To us, that would have been a significant loss," said Rice, head of the Kentucky Public Library Association Advocacy Committee. "I am very relieved to hear that the House has been able to come up with an alternative method of funding the PVA budget."

■ An extra $10 million for the Legislative Research Commission, to let legislative employees get the same pay raises as other state workers while cutting the LRC's operational budget by 5 percent, Rand said. It's also unclear where that money is coming from.

■ Instructions for Republican Agriculture Commissioner James Comer, a likely 2015 gubernatorial candidate, to assume a total of $4 million in spending responsibility over two years for four initiatives: diabetes education in public schools, the Appalachian Renewable Energy Efficiency Program, county fair grants and the Farms to Food Banks program. The Agriculture Department would get about $17 million a year in General Fund appropriations.

Holly Harris, a department spokeswoman, said Comer was surprised Monday to learn about the "unfunded mandates" awarded by House Democrats. The county fair grants and the Farms to Food Banks program will probably remain with the agency, while the other two initiatives might be removed before the legislature approves a final budget, Harris said.

"It does appear that we've been singled out," Harris said.

House Speaker Greg Stumbo, D-Prestonsburg, said it wasn't a political jab. Lawmakers searched everywhere for extra money, and Comer's office had a contingency fund available to be tapped, Stumbo said.

"You're going to see that throughout the budget. It wasn't just Jamie," Stumbo said.

■ An additional $29.5 million that Beshear is instructed to spend on Kentucky's PRIDE programs, which organize litter removal, illegal dump cleanups, septic system grants and other environmental projects.

■ An extra $1 million in debt service for state parks maintenance.

■ An additional $6.1 million over two years that the executive branch is instructed to spend on commonwealth's attorneys and county attorneys.

■ Cuts to the office of Energy and Environment Secretary Len Peters. The House would take $300,000 over two years from that office — about 4 percent of the total budget recommended by Beshear — and would require it to pick up oversight of the Environmental Quality Commission, which is budgeted to spend about $290,000 a year in restricted funds.

Peters won't comment until the budget is finished, spokesman Dick Brown said Monday.

■ The withdrawal of $1.2 million more from the state's Petroleum Storage Tank Environmental Assurance Fund, meant to assist property owners with the cleanup of underground fuel tanks. Beshear already proposed taking $32 million from the fund to balance his budget, and that would be slightly more than half the money in the fund.

■ Instruction for the School Facilities Construction Commission to make an additional $100 million in assistance offers to school districts during the 2014-16 biennium, "with the expectation that funding will be provided in the 2016-18 biennium."

■ An additional $42 million over two years that Beshear is instructed to spend on Family Resource Centers and Volunteer Services, Community Based Services, and Aging and Independent Living.

■ An additional $6.7 million annually in projected savings from penal reform that the Corrections Department is instructed to spend on substance abuse treatment.

■ An additional $1.27 million that Beshear is instructed to spend to hire 15 caseworkers by January at the Department of Public Advocacy.

■ An additional $15.3 million that the judicial branch is instructed to spend over two years on pay raises for employees, plus $11 million for pension contributions and $1.2 million for health insurance.

■ An additional $26 million over two years that Beshear is instructed to spend on preschool for 4-year-old children whose families are within 160 percent of the federal poverty level.

John Cheves: (859) 231-3266. Twitter: @BGPolitics. Blog: Bluegrasspolitics.bloginky.com.

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