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Budget tops legislators' agenda

As many Kentuckians wait to see how the state legislature will handle a nearly half-billion-dollar budget shortfall, an Eastern Kentucky couple hopes lawmakers can scrape up $140,000 in state funds to keep a mobile health van operating in the mountains.

Their plight shows the far-reaching effects of the state budget.

"We need the health van. We can't afford a doctor at $62 a visit," said Ann Dunn, who lives in a rural area about 15 miles from Campton with her husband, Leslie. "Legislators should raise taxes, do whatever it takes, to keep the van from shutting down."

Money for the van and for schools, state police and a multitude of other programs will be on legislators' minds when they return to Frankfort on Tuesday to complete 26 days of making law in the 2009 General Assembly.

For the last three years, the Dunns have relied on the Eastern Kentucky Mobile Health Service van to receive free medical help and medications.

Unable to work at age 40, she gets from the van medications worth about $280 a month for a bladder disorder, high cholesterol and high pressure in her eyes that can cause blindness if not treated.

Leslie Dunn, 52, a laborer with high blood pressure who says jobs these days are scarce, had a malignant melanoma removed from his arm for free. A nurse practitioner in the van had discovered the cancer.

Last July, the state reduced its funding for the van by about $40,000. In December, the state, in another round of cuts, trimmed the van's budget $100,000.

"If this money is not restored to the state budget, we will only have funds to operate this program for a few more months," said F. Rose Rexroat, administrator at Saint Joseph Hospital for the Eastern Kentucky Mobile Health Service.

The Lexington hospital administers the mobile clinic in collaboration with Appalachian Regional HealthCare and St. Claire Regional Medical Center in Morehead.

Since 2003, the van has made weekly stops in Hazel Green in Wolfe County, Blaine in Lawrence County and Ezel, Cannel City and Crockett in Morgan County to provide health care to the needy.

With an operating budget of about $359,000, it treats about 2,000 patients a year. About 63 percent of its patients are, like the Dunns, uninsured. The clinic is funded by the state and those patients who have Medicaid or some other type of medical assistance.

Confident of solution

The state's budget problems jumped to the top of the list of legislative concerns last November when Gov. Steve Beshear received a somber report from a group of independent economists.

The so-called Consensus Forecasting Group raised the projected revenue shortfall for the state's General Fund from $294 million to $456.1 million. That represents about a 5.1 percent decline in the $8.9 billion of revenue that was expected for the state.

A few weeks later, the Democratic governor unveiled his plan to address the shortfall.

It involved raising the state cigarette tax from 30 cents to $1 a pack, putting state workers on three days of unpaid leave, implementing 4 percent to 6.7 percent budget cuts in many state agencies, diverting surplus coal severance tax proceeds from coal counties to the state treasury and draining the state's "rainy day fund" for emergencies.

Beshear's plan, which he called "a starting point," avoided layoffs and cuts in Medicaid benefits, basic school funding, mental-health programs, juvenile justice and corrections. Higher education would get a 2 percent hit.

In recent weeks, legislative leaders have been mulling over Beshear's plan and scrutinizing the state budget for possible additional cuts.

They have offered few specifics on what they are going to do, but they have emphasized they are working together.

Senate President David Williams, R-Burkesville, and newly elected House Speaker Greg Stumbo, D-Prestonsburg, say they are confident that the legislature can come up with a resolution. Stumbo even expressed hope last week that the budget issues can be addressed within the next two weeks.

Beshear and legislative leaders repeatedly have said all options are being considered. The most-mentioned phrase in the Capitol these days is, "Everything is on the table."

But lawmakers appear wary of approving a hefty cigarette tax, using a coal severance tax surplus and implementing furloughs.

Some other possible actions they have explored include putting off debt by delaying some building projects, freezing salaries, reducing the number of non-merit — or politically appointed — positions and focusing on dollars spent in the Department of Education for non-classroom uses.

Can lawmakers fulfill the constitutional mandate of a balanced state budget without raising taxes?

"I don't know," Senate leader Williams said last week.

He has consistently said there is little sentiment in the Republican-controlled Senate to raise taxes. The Democratic-controlled House last year approved a 25-cent-a-pack cigarette tax boost and tax increases on a few services, but the Senate did not accept them.

Slots at tracks

In addition to finding a way to fix the budget, Stumbo is pushing a bill to allow electronic slot machines at Kentucky racetracks. He estimates the state could earn $235 million in tax revenue the first full year of operation and up to $340 million annually within five years.

Stumbo concedes that his bill is unlikely to help the budget shortfall for this fiscal year, which ends June 30, but thinks it could help next fiscal year with money to advance a building schedule.

Opponents say the bill cannot live up to Stumbo's claims.

The General Fund, which pays for most state programs, is not the only financial headache for Beshear and the legislators. They also face a $104.7 million shortfall in the Road Fund that has to be made up by June 30.

Major help for the Road Fund could come from Washington.

Beshear, speaking at a transportation conference last month about the Road Fund, said, "There's light at the end of the tunnel in the form of the federal stimulus package."

He was referring to the $819 billion economic stimulus package passed by the U.S. House last week. It includes as much as $2.8 billion over two years for Kentucky.

However, questions remain about the package: Will the U.S. Senate change it? When would it be available? Would a special session of the state legislature be needed to appropriate money from the package?

Beshear and legislative leaders are excited about the federal package but say they must be sure to deal with the fiscal crisis at hand.

All parties seem eager to approve a six-year road plan for the state. Last month, a Franklin circuit judge declared the plan approved last year unconstitutional, saying it was not delivered to the governor on time.