tool name

Monday, Jul. 06, 2009

Ambitious agenda in tough times

Slots got closer to passage than ever but didn't make it all the way

Last month I called the Kentucky General Assembly into special session to deal with an ambitious agenda that required urgent action and bold leadership in the face of tumultuous global economic pressures.

With the session over, it's time for a frank assessment of those eight days.

First, let me talk about significant accomplishments related to the budget, jobs and economic development and transportation. They occurred because — for the third session in a row — legislators and I collaborated to put the people of Kentucky first.

Policy and problem-solving triumphed over partisan politics and historical rivalries. What specifically did we accomplish?

First, the legislature approved my plan to fill a projected $1 billion hole in a $9 billion budget caused by depressed tax receipts.

My plan did not raise taxes. Instead, it relied primarily on one-time use of federal stimulus funds and on spending cuts — hundreds of millions of dollars of cuts on top of the $600 million we've cut in the past 18 months.

These cuts will be made carefully to preserve our top priorities — the SEEK formula that funds our K-12 classrooms, higher education, the Medicaid safety net, which is being used by an increasing number of families who formerly eschewed public help; and key public safety areas like police officers, prisons and prosecutors.

We held back some stimulus funds to fill anticipated holes in the 2011 budget.

Second, the legislature adopted my proposals for creating and retaining jobs by strengthening Kentucky's attractiveness in a climate of intense competition and by nurturing our existing businesses. These included:

■ A long-overdue updating of our economic incentives toolbox.

■ Changes to attract a NASCAR Sprint Cup race, future Breeders' Cup World Championships, historic preservation opportunities and the film and theater industry.

■ And a resolution needed for a proposed advanced battery manufacturing facility in Hardin County, a complex that could establish Kentucky as the epicenter of the car manufacturing world of the future.

Third, we created a mechanism for funding mega-transportation projects such as bridges linking Kentucky and Indiana in Louisville and Western Kentucky. This will create momentum on these projects while freeing up financing for roads and other infrastructure around the state.

Now, let's talk about concerns. The one item of unfinished business is helping the beleaguered horse industry respond to competition from other states.

I put forth a proposal allowing horse tracks to offer slots-style gaming to raise money for purses and breeders incentives. The proposal also helped the General Fund.

I knew this issue would be controversial but it was time to see who would stand up for Kentucky's signature industry.

I respect differences of opinion. But the decision to kill the bill in a Senate committee — while proposing that we instead increase taxes or raid the General Fund to put a Band-aid on the industry — was shortsighted.

We pushed the bill further than it's ever been pushed but that's little solace to the breeders, trainers, jockeys, farmers, truck drivers, backside workers and others whose jobs are in jeopardy. We now must assess how to remain the Horse Capital of the World.

And finally, the process of balancing future budgets was made more difficult when the General Assembly created new financial obligations without including the revenue for them.

I support those ideas, which included tax breaks for active duty military personnel and people who buy new cars and houses. But the General Assembly made those tax cuts effective immediately instead of in 2011, as I had requested. The decision will force deeper cuts to other agencies whose funding has already been reduced, in some cases by more than 20 percent.

We will make these cuts. We're here to lead. But as we head into another difficult budget cycle, we must — all of us — be mindful of the impact of the fiscal decisions we make.

My goal continues to be two-fold: First, help families survive these challenging times. And second, position our state for growth when the economy rebounds. This special session furthered both of those goals.

It is clear that the road ahead remains rough. However, by working together, I'm confident we will get through this.