Politics & Government

House approves Medicaid budget fix and dropout age increase

FRANKFORT — The Democratic-controlled House approved several of its top priorities Thursday, including a bill to balance the state's Medicaid budget and a measure that would increase the state's dropout age from 16 to 18.

But those proposals face an uphill battle in the Republican-controlled Senate.

To balance Kentucky's $6 billion Medicaid budget, House Bill 305 would move about $166 million from next year's Medicaid budget to the current year, an action requested by Gov. Steve Beshear.

The hole in the Medicaid budget was caused in part because the legislature had built its two-year budget with the assumption that the federal government would continue providing a larger-than-normal portion of the Medicaid budget. However, some of that money never materialized, leaving a $100 million hole.

Rep. Rick Rand, D-Bedford, chairman of the House budget committee, told members of the House that moving money to this fiscal year also would help the state bring in more federal money.

If the legislature does not approve the move, the administration has warned that it will have to cut $600 million from the state and federal health care program that serves 800,000 Kentuckians. That could mean 30 percent cuts to all health care providers.

"It would put us in a terrible position," Rand said.

But many Republicans questioned whether the Beshear administration could do more to generate savings in the Medicaid budget.

Last year, the administration said it could save $120 million through a host of cost-saving measures but now says it will generate about $86 million in savings this year. And the administration has failed to show how the reduced amount of savings will be generated, said Rep. Jim DeCesare, R-Rockfield.

DeCesare tried unsuccessfully to add an amendment to the bill that would move only $100 million from the next fiscal year.

Senate President David Williams, R-Burkesville, and Senate budget chairman Bob Leeper, I-Paducah, have expressed similar reservations about the budget bill.

The House ultimately voted 80-19 to pass HB305.

The House spent more than an hour debating a bill pushed by first lady Jane Beshear that would increase the dropout age from 16 to 17 by 2015 and to 18 by 2016.

The bill also would direct the Kentucky Board of Education to establish guidelines for alternative education programs.

Rep. Jeff Greer, D-Brandenburg, sponsor of HB225, said the legislature has been debating increasing the dropout age since 1990. It's an idea whose time has come, he said.

Those who do not graduate from high school annually make on average $6,800 less than those who do graduate. Most people who drop out will need some form of public assistance, Greer said. Many of the state's prisoners do not have high school degrees, he said.

"It amazes me that this is a debate," he said. "We can't afford not to make these changes."

But some Republican legislators said they were concerned that students not interested in school won't have enough alternative education options, including charter schools.

Rep. Johnny Bell, D-Glasgow, questioned why Republican legislators were trying to interject charter schools into the debate. Those lawmakers have had more than two years to bring up concerns about charter schools with Greer but failed to do so.

Bell, a lawyer, said the argument about charter schools was not germane to the dropout bill. But because they were not in a court of law and a judge could not hold them in contempt of court, Bell told the Republicans he had "contempt for you."

Republican Rep. Brad Montell of Shelbyville, a strong proponent of charter schools, shot back that he was not trying to hijack the debate on the dropout age. He said he was frustrated that bills calling for charter schools had never been voted on in the House in four years.

"It puts a little contempt in my heart as well," Montell said of his frustrations.

The House voted 91-8 to pass the bill. The eight members who voted against the measure were all Republicans.

Williams said Thursday that he does not know what Senate Education Chairman Ken Winters has planned for the dropout bill. Asked whether the phase-in provisions were adequate, Williams said he was not familiar with them.

"I understand the dropout bill is the governor's entire agenda this time, so we obviously will take a good look at it," said Williams, who would like to replace Steve Beshear as governor.

"There's a lot of opposition to just putting a window-dressing sort-of-dropout bill out here and act like that's going to change anything," he said.

Beshear, in a written statement, said the bill would do a lot to increase Kentucky's economic standing.

"Keeping students in school greatly enhances Kentucky's ability to offer its citizens the quality of life they deserve," Beshear said. "As a state, we cannot afford to delay this long-overdue change any longer, and I call on the Senate to pass this bill."

The House also voted 99-0 to approve a measure that would let the University of Kentucky use tax breaks to help spur a multiuse development at its long-troubled Coldstream Research Campus.

House Bill 310 would let university research parks and military bases apply for tax increment financing, commonly called TIF, for development projects. TIF uses taxes generated from development to pay for infrastructure improvements such as new streets, utilities, demolition, landscaping and parking structures.

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