Franklin County

State budget negotiations could resume Friday

Top-ranking House Democrats said Wednesday they're making some concessions to "meet in the middle" with Senate Republicans and break the weeks-long impasse over the state's $17 billion, two-year spending plan.

House Speaker Greg Stumbo, D-Prestonsburg, informed Senate President David Williams, R-Burkesville, by letter late Wednesday that they are close to drafting the latest counterproposal, and he suggested reconvening formal negotiations Friday.

But Williams, in a four-sentence reply to Stumbo, didn't commit.

"As you will recall, I requested you forward to me a written counteroffer consistent with the expenditure, debt, and structural imbalance levels contained in" a budget bill approved by the Senate last week before the General Assembly adjourned until April 14, Williams' letter said. "Once you submit a counterproposal, we will promptly review that document and respond to you."

The legislature must pass a budget before midnight April 15, or Gov. Steve Beshear would probably have to call lawmakers back for a special session before the 2011 fiscal year begins July 1.

"We are hopeful that they will come to an agreement soon for the good of all of Kentucky's citizens," Beshear said in a statement. "Passing a budget is the most important task of the General Assembly, and people of this state expect nothing less."

The House Democrats have sought to protect more than $1 billion in water, sewer and school construction projects they put into the budget. The Senate struck that spending from the bill as Republicans expressed concern over the state's mounting debt.

"We do scale it back some," Stumbo told reporters after House Democratic leaders met with Beshear Wednesday morning. Stumbo declined to say how much they planned to cut from the list of projects.

The state would have to designate about 7 percent of its revenue to cover debt for projects, Stumbo said, noting that the counterproposal would have more than the 6.88 percent debt ratio that Senate Republicans had said was their maximum. But the percentage would be less than the 7.66 percent of tax revenue that the original House version of the budget bill had tagged for debt payments. Beshear initially proposed about 7.8 percent.

House and Senate leaders have failed to agree on how to trim education funding. The House budget bill cut two instruction days from the schools' calendar. The Senate, with support from Education Commissioner Terry Holliday, restored the days. Instead, the bill cut 1.5 percent from the school funding formula in fiscal year 2011 and 1 percent in 2012.

In the House's draft counterproposal, the state would pay to restore one school day in 2011 and require the school districts to fund the other day, Stumbo said. School districts would have to pay to keep both school days in 2012, he said.

During a 40-minute meeting, House Democrats and Beshear also discussed a Senate bill that would allow Kentucky to create charter schools. Holliday said the measure — which was proposed and passed in the Senate in a matter of hours last Thursday — is a key tool that could help the state win as much as $180 million in federal education grants, known as Race to the Top funds.

"We're going to be talking about that with some of our members," Stumbo said. "The problem is, in the waning days of the session, that's a pretty controversial issue."

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