FRANKFORT — House and Senate leaders pledged Monday to leave Frankfort by week's end with a state budget for the next two fiscal years, but the fate of a new road-building plan remains uncertain.
Leading lawmakers appeared confident on the first day of a special legislative session that a two-year budget will be passed by Friday, the minimum amount of time it takes to pass a bill through both chambers. But there was still bickering between the House and the Senate on the state's two-year and six-year road plans and some last-minute concerns about a bill that would allow bourbon distilleries to offer free samples at upcoming events, such as the Alltech FEI World Equestrian Games.
If lawmakers fail to approve a new budget, much of state government must shut down when the new fiscal year begins on July 1.
In addition to the budget, road plans and bourbon-tasting bill, Gov. Steve Beshear asked lawmakers to approve a measure that would help shore up the state's ailing unemployment insurance trust fund. Despite support from the Kentucky Chamber of Commerce and labor unions, the proposal died in the Republican-led Senate in the regular legislative session that ended April 15.
Also filed Monday was a measure that would allow charter schools in Kentucky on a limited basis. Rep. Harry Moberly, D-Richmond, filed the bill even though Beshear did not put charter schools on the agenda for the special session. Only the governor can call a special session and set its agenda.
Moberly said he filed the bill because the state was at risk of losing millions of dollars in federal funding from the competitive "Race to the Top" program. Still, House Speaker Greg Stumbo, D-Prestonsburg, said there is not enough time in a five-day session to thoroughly vet the issue of charter schools.
Beshear, at a press conference later Monday, said he would not amend the call of the special legislative session unless there was an agreement between the House and Senate on charter schools. Senate President David Williams, R-Burkesville, said Monday afternoon the Senate had long supported charter schools but he had not seen Moberly's bill.
Both the House and Senate filed their versions of a more than $17 billion compromise budget Beshear proposed after the legislature left Frankfort without passing a budget last month.
That proposal included 3.5 percent spending cuts in the first year and 4.5 percent cuts in the second year to most state agencies. Some agencies, such as Medicaid, mental health services, state prosecutors and public defenders, received a less drastic cut under the compromise budget.
Earlier this year, the House had proposed borrowing more than $1 billion for a host of construction projects to help stimulate the economy. The Senate rejected the projects, saying now was not the time to add to the state's debt.
As a compromise, Beshear proposed a little more than $5.6 million in "equalization money" to replace some of the state's worst school buildings, commonly called Category Five schools. But Stumbo said Monday the House's budget plan nixes the state portion of the building fund because there wasn't enough money to replace all 14 of the state's Category 5 schools.
The House also made changes to a proposal that would save money by tweaking the state health insurance plan.
The House and Senate had agreed to changes in the health plan that would spur more people to select the basic health care plan over the optimum plan, a move that could save millions of dollars.
After hearing complaints from state employees about deductibles and other issues, the House is proposing to let the Kentucky Group Health Insurance Board propose a health insurance plan that would address the workers' concerns while still saving the same amount of money.
The House version of the budget does not include language that would allow Beshear to furlough state employees. Stumbo said lawmakers are still considering the issue, but they want to ensure any furloughs apply to the highest paid workers, not just rank-and-file employees.
Also, the House included a measure that would slash Economic Development Cabinet Secretary Larry Hayes' salary from $250,000 to about $127,000 — the same salary as the governor. Beshear has previously criticized the proposal.
The House Appropriations and Revenue Committee will take up the House's budget proposal at 10 a.m. Tuesday. Stumbo said he expects no other major changes to the budget proposal before the full House considers the bill on Wednesday.
Also on Monday, about 200 people participated in a rally on the front steps of the Capitol to support "a just and compassionate" state budget.
Speakers ranged from the Rev. Marian McClure Taylor, executive director of the Kentucky Council of Churches, to Brent McKim, president of the Jefferson County Teachers Association.
Taylor told the crowd Kentucky will continue to lag behind the nation until "we fix our broken tax structure." McKim and several others wore red T-shirts with a message to legislators on the back. "Don't balance the budget on the backs of teachers," it said.
Meanwhile, negotiations on the road plans continued on Monday, but the two chambers still appeared at odds.
Stumbo said the House has problems with the way the Senate packed nearly $2 billion in additional projects into the six-year road plan. He said it's irresponsible to continue adding projects to the long-term road plan that the state doesn't have the money to build.
Williams has countered that the House is trying to dictate which projects get built in Senate districts, which was also unfair. The Senate wants to designate 45 percent of the road projects, he said.
Stumbo said if an agreement cannot be inked on the road plans, the House will have a measure that will allow the Transportation Cabinet to continue to operate and receive federal funds so there would not be a disruption in road work.
"We will adjourn on Friday," Stumbo said.
Williams said lawmakers may also agree to release road maintenance money to local governments even if there is no compromise on the overall road plan.
There may also be some changes to a bill that would allow bourbon distillers to provide free samples at area events.
Eric Gregory, president of the Kentucky Distillers Association, said lawmakers Monday questioned whether the proposal applies only to the World Equestrian Games this fall at the Kentucky Horse Park in Lexington and if it would apply only to wet counties.
Gregory said the bill is not limited to the Games, but it does only apply to wet counties. He said hundreds of conferences have requested the bourbon samplings.
Gregory noted similar measures have been passed twice by both the House and Senate in recent legislative sessions, although the same bill has never cleared both chambers.
"It's an important economic development and tourism tool for the state," he said.
The measure, House Bill 6, is to be considered at 10 a.m. Tuesday by the House Labor and Industry Committee. The panel may present a substitute proposal.