Kentucky budget talks hit ‘complete impasse’

House and Senate negotiators abruptly stopped their work on a budget at 11:30 p.m. Sunday without any plans to meet again.

“Honestly, we’re at a complete impasse,” Senate budget chairman Chris McDaniel, R-Latonia, said early Monday.

McDaniel also said the full legislature would meet Tuesday for the final day of this year’s General Assembly.

Asked if the legislature would end without a budget, McDaniel said, “Unless the House decides to invest in the worst-funded pension system in the nation, we will not have a budget.”

House Democratic leaders released a statement early Monday saying Senate Republican leaders “walked away during discussions about changing the calendar.”

House Democrats said they recommended because of the late hour and the considerable amount of work remaining to move the last day of the session to Wednesday, Thursday or Friday. The state Constitution requires the session to last no later than midnight April 15, which is Friday.

They said they thought a “framework for compromise” had been established, “but we learned that there were problems in some areas we thought had already been agreed to.”

They added that they “remain committed to resolving the budget during this session. We are ready to get together at the call of the budget chairs.”

Senate Republican leaders had no immediate comment on the efforts to reach agreement on a two-year, $21 billion spending plan for the state.

Senate President Robert Stivers had said at 10:30 p.m. Sunday that he thought lawmakers on the conference committee would be working several more hours.

Both sides had said progress was being made.

Stivers said earlier that the Republican-led Senate and Democrat-controlled House had hoped to craft a budget suitable to both sides so the House and Senate could put it to a vote Tuesday, the scheduled 60th and final day of this year’s legislative session.

If no budget agreement is reached this week, a costly special session would be needed. If there is no budget by the start of the fiscal year on July 1, the result would be a partial shutdown of state government. Under that scenario, the governor could spend money only on constitutionally required services such as corrections and federal mandates such as Medicaid.

Sunday’s budget negotiations began shortly after 2 p.m., with an hourlong break for supper about 6:30 p.m. Negotiators returned to the table about 8.

Shortly before the negotiations began Sunday, House Speaker Greg Stumbo, D-Prestonsburg, said he was optimistic an agreement could be reached. Before the supper break, Stivers, R-Manchester, said, “Good progress is being made.”

The main sticking point appeared to be university funding.

Leaders of the House recently unveiled a compromise state budget plan that would cut higher education 2 percent in the next fiscal year, but seven of Kentucky’s eight university presidents reluctantly told Republican Gov. Matt Bevin they could manage “the governor’s final offer” of a 2 percent cut in the ongoing fiscal year “if it is determined by the courts to be permissible,” and a 4.5 percent cut in the following two years.

The signees included Jay Box, president of the Kentucky Community & Technical College System, but not Kentucky State University President Raymond Burse.

Bevin initially proposed a 4.5 percent cut in university funding this fiscal year, which ends June 30, and then 9 percent in the next biennium. The Republican-led Senate agreed to reduce the size of the cuts to universities to 4.5 percent for the next two years.

On March 31, Bevin ordered a 4.5 percent cut in higher education for this fiscal year. Attorney General Andy Beshear is expected to decide Monday whether to file a lawsuit in Franklin Circuit Court challenging the legality of Bevin’s order.

The governor said the cuts were necessary to shore up the state’s ailing public pension systems. They have a combined unfunded liability of more than $30 billion.

The House compromise plan also calls for funding the “Work Ready” scholarship program, which would pay tuition for new high school graduates going to community college after existing state scholarship aid programs have been used. That proposal would cost $13 million in the first year of the budget and $20 million the following year.

This story was originally published April 10, 2016 at 7:48 PM with the headline "Kentucky budget talks hit ‘complete impasse’."