By RONNIE ELLIS
GLASGOW — Gov. Steve Beshear says the state needs a “quick answer” on a $456 million budget shortfall, but lawmakers made clear it won’t come in a special session and probably not quickly.
Senate President David Williams, R-Burkesville, said Monday afternoon a budget fix isn’t likely by the end of January. And he had a couple of surprises: proposing to eliminate the CATS testing system, a review of Medicaid spending, and requiring state prisoners to work to pay for their imprisonment. He said all will save the state money over time though none would affect the current year’s shortfall.
“I don’t know anybody who thinks it’s going to be done by January,” Williams said of a budget remedy. The Senate is “not looking at just the next six months. We’re looking at the entire biennium.”
Beshear initially said he might call a special session to deal with the revenue shortfall in the midst of the short, non-budget General Assembly session, which begins Tuesday. When voters approved a constitutional amendment to allow annual sessions, they approved a provision requiring a constitutional majority of 60 votes in the House and 23 in the Senate to pass revenue measures in those short sessions. Since Besehear’s remedy for the shortfall includes an increase in the cigarette tax, that “super majority” requirement could be by-passed in a special session.
Beshear has repeatedly said he wants a resolution to the budget as soon as possible so agencies, local governments and school districts will have more time to absorb any cuts required in this fiscal year, which ends June 30.
“I don’t have a preference on whether we address it in this regular session or a special session,” Beshear said Monday. “My preference obviously is that we do it expeditiously because we’re going to need to move fairly rapidly to get a budget in place so our agencies know how to respond over the remaining months of this fiscal year.”
Speaker of the House Jody Richards, D-Bowling Green, (who faces a challenge Tuesday from Rep. Greg Stumbo for the Speaker’s job) said there are a number of obstacles to either a special session or using days in January when lawmakers traditionally recess after a week of organization during the short sessions.
Those include elections for leadership and making committee assignments this week, and Richards said many members want to attend the inauguration of President-Elect Barack Obama in two weeks.
“If the House and Senate and Governor can come to agreement (on a budget fix), we can get the 60 votes in the House to get done whatever needs to be done,” Richards said.
Beshear wants to increase the cigarette tax by 70 cents to $1 but Richards said it may be hard to find enough votes to pass that large of an increase. He pointed out the House last spring passed a 25-cent increase, which couldn’t pass the Senate. And Williams said later Monday the Senate isn’t interested “in just throwing more money into the system” that is “structurally out of balance and has been for several years.”
Senate Republicans want to replace the CATS with a national test, which Williams said could save money on the front end in testing costs and more instructional time, and on the back end by reducing the need for remedial classes for college freshmen. That’s something previously proposed in the Senate but opposed by the House and Beshear.
So despite assurances by both Beshear and Williams on Monday that they are striving to improve their working relationship, Williams’ proposals don’t suggest smooth sailing.
Richards and Beshear are willing to entertain proposals to reform the state tax code to apply sales taxes to services, but Beshear said that won’t help the immediate shortfall. The House last spring proposed adding the sales tax to some “luxury” services such as limousine, armored car deliveries and laundry services but it died in the Senate as well.
Richards conceded the House measure was an attempt to begin shifting some of the tax burden to sales taxes on services. “You could say that.”
Williams said the Republican Senate is willing to look at tax reform but he made it clear they aren’t prepared to raise any taxes until expenditures have been cut as much as possible.
Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com.
