FRANKFORT — House and Senate leaders will start negotiating a compromise two-year state budget Monday but only have about a week to settle their differences if they hope to override any vetoes Gov. Steve Beshear might make.
House Speaker Greg Stumbo, D-Prestonsburg, was optimistic Friday that the Democratic-led House and Republican-led Senate can strike a deal next week on the more than $19 billion budget.
"We're really not that far apart," Stumbo said.
But Senate President David Williams said he is "very concerned" about the fleeting days of this year's General Assembly and the heavy workload that remains. Friday was the 54th day of the 60-workday session.
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Williams, R-Burkesville, said the Senate wanted to work Friday with the House on the state budget but was informed late Thursday that House leaders would not be available until 10 a.m. Monday.
If leading lawmakers don't reach a compromise on the budget by week's end, they probably won't be able to preserve their final working day in mid-April to override potential gubernatorial vetoes.
Stumbo said shortly before lawmakers began meeting Friday morning that the House had not seen the Senate's version of the budget. House leadership will review the differences between the House and Senate plan over the weekend, he said.
To boot, the Senate has yet to consider House Bill 499, a revenue bill that includes a tax amnesty program designed to generate additional revenue for the state. Williams said Friday he expects the Senate to vote next week on HB 499.
Corbin Mayor Willard McBurney said in a phone interview that he is concerned the Senate will alter the measure to include a provision that would prevent his city from implementing an occupational tax.
He said Senate Majority Leader Robert Stivers, R-Manchester, is considering amendments to HB 499 that would block the occupational tax.
The city of Corbin, which is in the counties of Whitley and Knox, and the Knox County Fiscal Court have fought for four years over the collection of occupational tax revenues. Stivers' seven-county district includes Knox.
The News Journal in Corbin quoted Stivers in its March 14 edition as saying Knox County Fiscal Court's ability to provide essential government services would be crippled if Corbin collects an occupational tax.
Stivers said Friday it would be premature to say how the Senate might amend HB 499.
The Senate passed its version of the two-year budget late on Thursday. The latest version kept many components of the Democratic House budget and Gov. Steve Beshear's original budget, which he proposed in January.
Like previous proposals, the Senate's budget cuts more than 8.4 percent from many state agencies, slashes cost-of-living increases for state retirees and leaves untouched the main funding formula for K-12 education. The Senate also kept other key proposals, such as $21 million for the hiring of 300 additional social workers and $1 million for a colon cancer screening program.
The Senate budget deleted two key Lexington projects, a $3.5 million bond for the redesign of a downtown Lexington district that includes Rupp Arena, and an additional $3.5 million for the Kentucky Horse Park for this fiscal year. The park is struggling with a $3.6 million deficit.
John Nicholson, executive director of the horse park, said he will be prepared to help the House and Senate as they negotiate a compromise budget.
"We hope the legislature will restore the needed funding," he said. "If not, we could lose millions in revenues."
Nicholson noted that the Senate version did allow the Horse Park access to a $575,000 maintenance pool for each year of the two-year budget. But he said that money comes from a capital construction fund fueled by investment income and appears regularly in state budgets.
The 30 public, charitable and membership organizations that are tenants of the park are running a media campaign to urge the legislature to help the park with funding.
In a newspaper ad, the group said they "are an economic engine that provides a substantial portion of the park's revenue" and provide "significant revenue to Lexington and Georgetown's hotels" with their trade shows, exhibits, competitions and annual meetings
It is essential that the park continues to provide services for them, the tenants say.
"While we are individually responsible for utilities, Internet access and telephone bills, the infrastructure that provides these services rests with the park and the Commonwealth of Kentucky," they say. "Any disruption would be catastrophic to us."
The tenants include the American Saddlebred Horse Association, Kentucky Equine Education Project, National Walking Horse Association, U.S. Equestrian Foundation and U.S. Pony Clubs Inc.
The Senate also dropped from the budget a new scholarship program designed to encourage more Eastern Kentucky students to attend and graduate from college. The measure was pushed by Stumbo after an attempt to add the University of Pikeville to the state university system met resistance from some coal-producing counties. Money from coal severance taxes — a tax on coal — would be used to fund the programs.
Stumbo said Friday that the removal of the scholarship program was simply a bargaining maneuver by the Senate.
The Senate version of the budget also nixes more debt and asks Beshear to cut an additional $98 million in private contracts. It also takes away a $2,500 monthly living allowance for Lt. Governor Jerry Abramson. Abramson lives in Louisville and commutes to Frankfort.
Stumbo said he did not have a problem cutting the $30,000 annual living expense.
Beshear, in a statement, did not comment on changes the Senate made.
The budgets for the judicial and legislative branches of government also received an 8.4 percent spending cut. In addition, the Senate's budget deleted language that would allow the courts to borrow money for an overhaul of the court's computer system.
"Replacing our obsolete case management system is critical to supporting the current and future needs of the Kentucky Court of Justice and the people who use the courts every day," said Laurie Dudgeon, executive director of the Administrative Office of the Courts.