Politics & Government

Major differences popping up between House and Senate Republicans on state budget

Senate President Robert Stivers answers a question from the media during a press conference at the Kentucky State Capitol Annex in Frankfort, Ky., on Wednesday, February 21, 2018.
Senate President Robert Stivers answers a question from the media during a press conference at the Kentucky State Capitol Annex in Frankfort, Ky., on Wednesday, February 21, 2018.

A plan by House Republicans to tax opioids and cigarettes will be difficult to pass in the Senate, the chamber’s top leader said Friday.

Senate President Robert Stivers, R-Manchester, also told reporters that expanded gambling is not a viable option for raising revenue and that he expects the Senate’s version of a two-year state budget to create a mechanism for funding charter schools. The House budget had no money for charter schools.

Republican Gov. Matt Bevin presented his two-year budget plan for the state in January. The House approved its own version on Thursday and the Senate now is working on its proposal.

A “free conference committee” made up of representatives from the House and Senate will meet in the final days of this year’s legislative session, which must end by April 15, to iron out differences between the two chambers.

Asked Friday if the Senate will accept the House plan to tax opioid drugs and raise the cigarette tax, Stivers said “I think it will be very difficult.”

If lawmakers can craft a comprehensive overhaul of Kentucky’s tax code in the next few weeks, “some of those components may be involved,” he said.

The House plan involves three taxes — a 25 cent tax on each dose of prescription opioids sold by a distributor to a pharmacy, a 50 cent increase on a pack of cigarettes and eliminating a $10 individual income tax credit. Combined, the changes would raise about $500 million to help provide more money for education, House leaders said.

Asked why it would be difficult to pass such a tax plan in the Senate, Stivers said “good taxing policy is something that grows and has growth rates.”

As smoking rates decline and the number of pain pills prescribed in Kentucky drops, as it has in recent years, those taxes will generate less money each year, he said.

Stivers bristled when asked if his position means the Senate will spend less on education.

“That’s what you are saying. You are trying to pigeonhole me,” he said. “We want to deal with education and we want to prioritize education. We plan to deal with education accordingly.”

The House plan is silent on money for charter schools.

Kentucky made charter schools legal last year, but the mechanism to pay for them expires June 30. Charter schools are exempt from most of the state standards public schools must follow.

Bevin did not include a funding formula for charter schools in his budget proposal, favoring instead passage of a law that means the funding mechanism wouldn’t expire every two years.

Stivers said Friday the Senate will consider a proposal for charter schools that “would allow funding to follow.” He did not say how that would be done.

It’s too early, Stiver said, to say if the Senate will accept the House’s decision to transfer $480.6 million over the next two years from the Kentucky Employees’ Health Plan to balance the budget. Bevin had proposed taking $201.5 million.

Though Stivers opposes expanded gambling, House Speaker Pro Tem David Osborne, R-Prospect, said discussion about the idea continues even though support appears to be lacking in the House.

“I filed the bill several years and they never did give me a hearing on it,” Osborne said. “So it’s one of those things that there’s gotta be some support for it pretty broadly to move it.”

Jack Brammer: (502) 227-1198, @BGPolitics