FRANKFORT — After a tense day filled with political posturing and rhetorical jabs, House and Senate leaders decided to wait until Monday to begin hammering out an agreement on how to fix Kentucky's Medicaid budget.
Following a short meeting late Friday afternoon between House and Senate leaders, House Speaker Greg Stumbo and Senate President David Williams remained hopeful that a deal between the two sides could be inked before March 22, the last scheduled day of the 2011 legislative session.
But time is running out and the two sides are philosophically far apart on how to deal with a potential shortfall in the $6.5 billion Medicaid budget.
The Democratic-controlled House has passed Gov. Steve Beshear's budget proposal, which includes shifting $166 million from next fiscal year to the current fiscal year in the Medicaid budget. The Senate has passed a measure that calls for cuts to almost all government agencies of less than 1 percent this fiscal year, which ends June 30, and 2.26 percent in the second year of the state's two-year spending plan. Education was spared in the first year of the proposed budget but would sustain cuts in the second year.
Senate Republicans have said they do not believe Beshear can generate $166 million in savings in the Medicaid program to plug the hole his plan creates in the second year of the budget.
Senate President David Williams, who is running for governor, had proposed earlier on Friday that the legislature adjourn if the sides could not come to an agreement by Friday night. He suggested lawmakers could return in a special legislative session once a compromise is reached, a move he said could save taxpayers more than $1 million.
Williams, however, later said the Senate will return on Monday, although he called Beshear's budget plan "without merit."
"Everyone in the legislature knows that you cannot approach this thing with the governor's approach," he said.
But House Republicans, in a rare move, issued a public statement on Friday that said their Senate colleagues' plan to cut education spending was a bad idea.
"I and the other 41 members of the Kentucky House Republican Caucus do not believe it is good policy to shift funding from education at a time when many of our school districts are counting pennies to balance their own budgets," said House Minority Leader Jeff Hoover. "It's a step in the wrong direction."
Hoover said the House GOP caucus had concerns solely about cuts to education and does not support Beshear's plan.
Williams said he agrees with Hoover that cutting education is "a terrible thing," but added that Hoover "hasn't been up here much during the session and I don't think he's aware of the full budgetary impact of the situation."
"If he looks at the entire budget, he will see that it will take more cuts to solve the problem," Williams said.
But Hoover said members of the House Republican caucus had heard overwhelmingly from educators in their home districts that they did not want education spending to be cut.
"It was the will of the caucus," Hoover said of the decision to issue a statement.
Meanwhile, Beshear blasted the Senate's plan for across-the-board cuts as "unreasonable and unnecessary" during a Capitol news conference with House Democratic leaders.
Beshear has proposed setting up a series of managed health care contracts within Medicaid to save money.
Since those contracts will not be signed until this summer, it's impossible for Beshear to know if he can produce the promised savings, Williams has said.
At the news conference, Beshear and Janie Miller, the secretary of the Cabinet for Health and Family Services, outlined how those Medicaid savings could be achieved.
All of the contracts would be signed by July 1, the beginning of the next fiscal year, said Miller, who oversees the cabinet in charge of the health care program that serves more than 800,000 Kentuckians.
Miller also pointed to several independent studies that have shown managed care contracts — which could include paying providers a set rate for each patient — cut costs. The state currently operates most of the Medicaid program by paying providers a set fee for each procedure.
"These aren't made up numbers," Miller said.
Beshear blasted the Senate's plan for its cuts to key areas of government, particularly education.
The Senate's proposal would cut $148.5 million from non-Medicaid areas of the budget, with 81 percent of the cuts coming from education, health care and public safety, he said.
"We are not going to allow Senator Williams to balance the Medicaid budget on the backs of our school children, our college students, our state troopers, our veterans, our prosecutors, our social workers and many others," Beshear said.
Teachers and parents "ought to be offended and outraged" that Williams has made an "unreasonable and unnecessary" proposal, Beshear said.
Williams later countered that Beshear is "trying to negotiate by press conference" and claimed that Beshear has poorly managed Medicaid and other cost-saving measures proposed by the legislature last year.