FRANKFORT — The Senate budget committee made several changes to a proposed two-year spending plan for the state late Thursday before unanimously approving the more than $17 billion budget.
Unlike the budget bill that cleared the state House earlier this week, the Senate proposal includes money to replace some of the state's most dilapidated school buildings, mandates changes to the state employees' health insurance plan and nixes funding for a private Christian school in Breathitt County.
The full Senate is expected to take up the budget Friday, which is expected to be the last day of a special legislative session that began Monday. Once the Senate approves its version of House Bill 1, leading lawmakers from both chambers will have to quickly compromise on their differences to adjourn late in the day.
Senate Budget Chairman Bob Leeper, I-Paducah, said after Thursday night's vote that school districts opting to increase property taxes would be given money from the state to build those schools. It's not clear how much money would be available.
The Senate version of the budget included language that would spell out changes to state employee health insurance that would save $94 million over the next two years. The House version set a target of $94 million in savings but deleted specific details about how health plans would be changed because of concerns from teachers and state workers about high deductibles.
The Senate's version of the budget made a series of changes to various projects and deleted a more than $100,000 appropriation to a Christian school in Breathitt County that had raised concerns in the House. The Senate version also deleted a provision that would have funded additional protections for the state's social workers referred to as the Boni bill, named after slain social worker aide Boni Frederick.
Overall, the budget cuts much of state government by about 3.5 percent in the first year and 4.5 percent in the second. Some areas of state government such as Medicaid, prosecutors and public defenders would receive limited or no cuts.
Also on Thursday, the Senate committee passed a series of amendments to House Bill 1. One of those amendments would allow the Administrative Office of the Courts to use money in its budget to buy and renovate a new office building. It is now paying $1.3 million a year in rent. By buying and renovating a building, it will save at least $700,000 a year, said Sen. Robert Stivers, R-Manchester.
The Administrative Office of the Courts is the only branch of government to have to lay off employees because of the state's ongoing budget woes. It is facing a budget deficit of nearly $10.6 million next fiscal year, Stivers said.
Another amendment allocated $200,000 for a Pew Center on the States research project to determine how to cut costs in the state's growing prison population.
Leeper said late Thursday that he could not predict how the House would react to the Senate's changes.
House Speaker Greg Stumbo, D-Prestonsburg, said earlier Thursday that he does not believe the Senate and House will have to appoint a conference committee to work out differences in their respective budgets.
Stumbo said he talked with Senate President David Williams, R-Burkesville, about the issue.
"He believes, and I believe, we will be through with our business tomorrow. There will be no need for a conference committee, and that we will be out of here tomorrow afternoon sometime," Stumbo said.
Also Thursday, the Senate Appropriations and Revenue Committee approved a revenue-raising measure, despite not knowing how much money the bill would generate.
The Senate tacked on four tax incentives for small businesses, donors to community philanthropic boards and an environmental tax credit for Toyota to House Bill 2, a revenue bill that is a companion to the budget bill.
The House's version — which did not include the tax credits — would generate about $88 million, mostly through savings. Many of the tax credits passed by the Senate Appropriations and Revenue Committee on Thursday will not take effect for several years, so they might not cost the state much, Leeper said.
Beshear said Thursday that it's too early to say what, if anything, he might veto in a budget bill. Beshear has warned legislators about a partial shutdown of state government if a budget is not passed by July 1, the beginning of the next fiscal year.
If the legislature adjourns Friday, as expected, it would not have the opportunity to override any veto the governor might issue.
In addition to the two budget bills, the Senate is also expected to vote on a bill Friday that would help shore up the state's bankrupt unemployment insurance trust fund.
The overhaul of the unemployment insurance program got the unanimous approval of a Senate committee Thursday night, but potential changes to the bill on the Senate floor Friday could doom the proposal that the House passed on Wednesday.
The measure, which business and labor leaders support, would increase taxes on employers and lower benefits for workers who have lost their jobs.