No deal on state budget

FRANKFORT — House and Senate leaders continued negotiations on the state's budget late Monday in hopes of meeting a midnight Thursday deadline.

They continued talks — some in person and some via telephone— past 9 p.m.

Brian Wilkerson, a spokesman for House Speaker Greg Stumbo, said that if an agreement wasn't reached Monday night, talks would continue Tuesday.

If negotiators reach an agreement Tuesday, it's still possible for the full legislature to approve the budget by midnight Thursday, which is when the Kentucky Constitution says the session must end.

The Democratic-controlled House and the Republican-controlled Senate have been at odds over the state's two-year, $17 billion budget since March 24.

The legislature returns Wednesday for the final two days of the session. Besides the budget, other key bills in limbo include a plan to shore up the state's ailing unemployment insurance trust fund, a measure that would increase the school dropout age to 18 and sweeping reforms to the state's domestic violence laws.

On Friday, the Senate agreed to some of the House's proposals, including passing a one-year budget, but it balked at borrowing money to fund more than $300 million in sewer, road and school projects.

The House originally had proposed nearly $1 billion in projects — construction jobs that could create or retain up to 25,000 jobs, House leaders claim.

The Senate, however, did agree to the House's proposal to cut two instructional school days rather than make deeper cuts to education that the Senate had proposed. The Senate also had agreed to the House's proposal to restore some funding to Medicaid, the state-federal health care program for the poor.

Republican leaders said Friday there was no support in the Senate to pass a budget that included additional borrowing.

Stumbo, D-Prestonsburg, said Friday the House could not agree to a budget that didn't include some money for projects to stimulate the economy.

"All of the Senate proposals to date have failed to address the need for job creation, the centerpiece of the House budget," Stumbo said late Friday.

If no agreement is reached Tuesday and legislators don't pass a budget by midnight Thursday, it's likely that Gov. Steve Beshear will have to call a special legislative session to address the budget before the next fiscal year, which begins July 1.

The cost of a special session could be up to $60,000 a day. If a budget isn't passed by the beginning of the fiscal year, some non-essential parts of government, such as the state park system, might have to shut down.

Half of the Republican-controlled Senate and all of the House are up for re-election this year.