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Friday, March 30, 2012

Kentucky Law Makers Avoid Childish Play, Pass Two Year State Budget. We Congratulate Them.

Kentucky Senate approves compromise state budget
By Beth Musgrave

FRANKFORT — The Republican Senate gave its approval Friday to a compromise two-year state budget that provides little money for new projects and cuts funding by 8.4 percent for many state agencies and 6.4 percent for state universities.

House Bill 265 now goes back to the House, where it is expected to get final approval later Friday and be sent to Gov. Steve Beshear.

Friday was the 59th day of the 60-workday legislative session. The General Assembly is set to return April 12 for the final day of the session, which will be used to consider overriding any potential vetoes by Beshear.

House and Senate leaders said early Friday that they did not expect an agreement on the two-year road plan on Friday. That means that the measure will likely be taken up on April 12.

The compromise budget includes an additional $3.5 million this fiscal year for the Kentucky Horse Park, which has struggled financially in recent several years. The budget also includes an additional $2.5 million to begin reworking Rupp Arena and nearby areas of downtown. The city must come up with $2.5 million in matching money.

The budget, which calls for spending more than $19 billion over the next two years, includes no pay raises for state employees and nixes a 1.5 percent cost-of-living increase for state retirees. It also does not cut the main funding formula for K-12 education.

House and Senate leaders negotiated the compromise budget early Thursday morning after three days of negotiations. Key points of contention between the Democratic House and Republican Senate over the two-year budget that begins July 1 included how much debt the state should incur and the funding of some projects paid for by coal severance taxes.

Senate budget committee Chairman Robert Leeper, I-Paducah, said the compromise budget includes less new debt and relies of less one-time money than previous budgets. It uses $217 million in one-time money to fund ongoing programs, down from $487 million in the two-year budget that ends June 30.

Using one-time money to balance the state's books was part of the reason why Kentucky bond rating was downgraded last May.

The budget also returns $72 million to the state's "Rainy Day" fund, another factor rating agencies consider when assessing the state's ability to repay its debts.

If the House approves the budget as expected, this will be the first time since 2006 the General Assembly has approved a two-year budget on time.

Read more here: http://www.kentucky.com/2012/03/30/2132753/kentucky-senate-approves-compromise.html#storylink=cpy

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