Kentucky House Set To Pass "Lean ... Frugal" Budget. Will Senate Bite Or Balk? Read More Below.
Stumbo says Democrats back budget plan
By Stephenie Steitzer
FRANKFORT, Ky. — House Democrats overwhelmingly support a broad plan to plug a $1.4 billion revenue shortfall in the budget for the next two years, House Speaker Greg Stumbo said Tuesday.
Stumbo, D-Prestonsburg, released few new details about the proposal, which calls for savings by eliminating two school days, cutting spending to higher education and suspending a tax break for businesses.
“The caucus voted overwhelmingly — overwhelmingly — to support the plan,” he said after an hour-long meeting of House Democrats, who control the chamber.
The measure does not include any broad tax increases or deeper spending cuts in priority areas of education and social services than those proposed by Gov. Steve Beshear. But not all details of the plan have been made public.
Leaders say they hope to present a budget document to members by the weekend so they can review it before the House budget panel takes it up, possibly next Tuesday.
House leaders in mid-January rejected about $1.2 billion in revenue proposals and borrowing by Beshear, including his proposal to generate $780 million by legalizing video slot machines at racetracks.
In recent weeks, Stumbo has unveiled a dozen proposals — spending cuts, revenue assumptions and fund transfers — that the House is likely to approve to close the gap left by the rejection of Beshear’s budget.
They include assuming that about $250 million more will come next fiscal year in federal stimulus funds for the Medicaid program. Other likely moves include eliminating two school days and cutting spending on government contracts and political appointees by eliminating some positions.
Stumbo also said the House will suspend for two years a corporation’s ability to carry forward past losses to offset current-year income for tax purposes. He has said this move would generate an anticipated $182 million during the upcoming budget period. ...
“It’s lean, we’re not raising taxes, we’re being frugal,” he said.
Stumbo said he did not count the votes of caucus members who are for the proposal.
Rep. Jim Wayne, D-Louisville, who has been pushing to overhaul the state’s tax code to generate additional revenue, said he opposes the plan.
“There’s no vision here, there’s no leadership here,” he said. “There’s nothing that says we’re actually going to progress as a state. Everything is just cut, cut, cut.”
Rep. Rick Rand, the Bedford Democrat who is chairman of the House budget panel, said he and legislative staff are still trying to determine the exact amount that would need to be cut from the state’s public universities.
Beshear proposed a budget that would trim the budgets of universities and the Kentucky Community and Technical College system by 2 percent in the second year.
Rand said budget drafters are looking at a roughly 1.5 percent cut to higher education in the first year and a less than a 2 percent cut in the second year.
Legislative leaders say they plan to spare the state’s funding formula for K-12 schools and cut less than Beshear’s budget in the area of human services.
Stumbo said leaders have scrapped a plan to eliminate an exemption from the state sales tax on hotel stays longer than 31 days. Airlines oppose this move, and it would generate only about $6.6 million over two years, he said.
By Stephenie Steitzer
FRANKFORT, Ky. — House Democrats overwhelmingly support a broad plan to plug a $1.4 billion revenue shortfall in the budget for the next two years, House Speaker Greg Stumbo said Tuesday.
Stumbo, D-Prestonsburg, released few new details about the proposal, which calls for savings by eliminating two school days, cutting spending to higher education and suspending a tax break for businesses.
“The caucus voted overwhelmingly — overwhelmingly — to support the plan,” he said after an hour-long meeting of House Democrats, who control the chamber.
The measure does not include any broad tax increases or deeper spending cuts in priority areas of education and social services than those proposed by Gov. Steve Beshear. But not all details of the plan have been made public.
Leaders say they hope to present a budget document to members by the weekend so they can review it before the House budget panel takes it up, possibly next Tuesday.
House leaders in mid-January rejected about $1.2 billion in revenue proposals and borrowing by Beshear, including his proposal to generate $780 million by legalizing video slot machines at racetracks.
In recent weeks, Stumbo has unveiled a dozen proposals — spending cuts, revenue assumptions and fund transfers — that the House is likely to approve to close the gap left by the rejection of Beshear’s budget.
They include assuming that about $250 million more will come next fiscal year in federal stimulus funds for the Medicaid program. Other likely moves include eliminating two school days and cutting spending on government contracts and political appointees by eliminating some positions.
Stumbo also said the House will suspend for two years a corporation’s ability to carry forward past losses to offset current-year income for tax purposes. He has said this move would generate an anticipated $182 million during the upcoming budget period. ...
“It’s lean, we’re not raising taxes, we’re being frugal,” he said.
Stumbo said he did not count the votes of caucus members who are for the proposal.
Rep. Jim Wayne, D-Louisville, who has been pushing to overhaul the state’s tax code to generate additional revenue, said he opposes the plan.
“There’s no vision here, there’s no leadership here,” he said. “There’s nothing that says we’re actually going to progress as a state. Everything is just cut, cut, cut.”
Rep. Rick Rand, the Bedford Democrat who is chairman of the House budget panel, said he and legislative staff are still trying to determine the exact amount that would need to be cut from the state’s public universities.
Beshear proposed a budget that would trim the budgets of universities and the Kentucky Community and Technical College system by 2 percent in the second year.
Rand said budget drafters are looking at a roughly 1.5 percent cut to higher education in the first year and a less than a 2 percent cut in the second year.
Legislative leaders say they plan to spare the state’s funding formula for K-12 schools and cut less than Beshear’s budget in the area of human services.
Stumbo said leaders have scrapped a plan to eliminate an exemption from the state sales tax on hotel stays longer than 31 days. Airlines oppose this move, and it would generate only about $6.6 million over two years, he said.
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