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Capitol Notes - April 9th "news is inauspicious"
 Editor's Note: An anonymous staffer at LRC has been writing Capitol Notes this session. They are all posted on the LRC website. I reprint this one here for two reasons: 1 - Anonymous staffer is a darn good writer who deserves some recognition (YaY You Anonymous) and

2 -The theory that the dispute between the House and Senate over the budget is philosophicaly related to the current impasse happening in Washington has been solemnly repeated by reporters and pundits as if it is the Gospel of Mark (or more apropos the Book of Revelation). No one seems to remember that a budget hasn't been passed in regular session since Kentucky voters were hoodwinked into voting for annual sessions. Long before the "philosophical differences" between the Dems and the GOP arose.

April 9, 2010 - Capitol Notes

FRANKFORT – With most lawmakers home for their veto recess and the budget conference committee not meeting though it could, prospects for passing a two-year state spending plan hung in precarious balance in Frankfort this week.
 
Indeed, the week’s early news was inauspicious. Some lawmakers familiar with the closed negotiations between House and Senate leaders made headlines by expressing public pessimism that the differences could be resolved by the time the Legislature returns to the Capitol next week, April 14-15, to wrap up business. 
 
Whether that pessimism prevails or a breakthrough occurs, that’ll be it for the 2010 regular session: the final deadline. Under the state Constitution, the Legislature must pass a budget before midnight April 15, when it is required to adjourn sine die.
 
Failing that, Gov. Steve Beshear would have to bring lawmakers back to Frankfort for a special session before July 1 to pass a budget for the coming fiscal year. And while it has happened before that that a budget wasn’t in place when the new year came, recent court rulings have limited the governor’s authority to keep a budgetless government operating to certain essential functions, like corrections.
 
Put simply, if it happens this time, parts of government and government services -- like state parks -- will shut down.
 
All told, there’s enormous practical and political pressure for the chambers to reach agreement, and the work continues. But the fact that House-Senate budget conferees were free to resume negotiations this week but had no meetings reflected in part how strongly each chamber is committed to its core position.
 
The disagreement isn’t so much in budget details as in philosophy, and in many ways mirrors the national recovery debate:
 
Would taking on significantly more bonded debt for badly needed school- and water-and-sewer construction projects be an economic boost, essentially a ‘jobs bill’ to put Kentuckians back to work and speed the recovery? Or an irresponsible piling on of more debt by a state already in perpetual financial uncertainty because of a chronic structural imbalance in its budget?
 
House leaders want projects bonding. There’s $1 billion of it in their original proposal. Most of that would go to replace aging schools. They say this will stimulate the state’s recession-ravaged economy and create 25,000 jobs for out-of-work Kentuckians. State unemployment is beyond 10 percent, and certainly more if you count ‘discouraged’ workers who’ve just quit looking.
 
Senate leaders point to that same recession and counter that piling on $1 billion in new debt would send the state into a ‘debt death spiral.’ They say the time has come to seriously belt-tighten government, share in the recessionary pain business and families feel, and address the chronic structural imbalance that has plagued the Kentucky budget for too many years.
 
This fundamental difference has created a formidable roadblock to a $17.5 billion budget bill that was hard to cobble together anyway, given a bottomed-out economy and estimates of up to $1.5 billion in likely revenue shortfalls over the next two years.
 
Still, both chambers have shown desire and willingness to compromise. By Wednesday, the House was preparing to release its own version of a compromise bill for discussion, something the Senate had already done just before the veto recess last week.
 
The Senate compromise had restored a good portion of the basic education funding its original budget had earlier cut. It also offered some flexibility on the school construction and other bonded projects the House wanted. But House leaders said the Senate proposal basically restated a position they had already rejected.
 
This week’s House compromise, its leaders say, will pretty much ‘meet in the middle’ with the Senate on projects spending – which means they’d propose around $500 million in bonds instead of a billion. It will also, they say, re-jiggle how the school projects are selected, to answer Republican objections in both chambers that the choices were politicized.
 
They will also drop their proposal to suspend an operating-loss tax deduction for business as a temporary way to raise money over the next two years. The Senate has opposed that as a tax increase that would hinder jobs creation.
 
It appears the two instructional days dropped from the school calendar by the House and restored by the Senate will survive into each chamber’s compromise proposal, with differences in how they’re funded.
 
House leaders sent a letter to the Senate Wednesday, saying their formal proposal was being drafted and would be in final form by Friday. They asked for a new meeting later that day. Senate leaders said only that when they received the House counterproposal, they would ‘promptly review that document and respond.’ At this writing -- early Friday -- Frankfort waits to see the final proposal, and hear the Senate reaction.
 
The only thing certain here is uncertainty. But by next Thursday, we'll know if the great budget struggle of 2010 has ended -- or we need to prepare for a special session.
 
The Kentucky General Assembly is committed to openness and citizen participation in its work.
 
Its Home Page, www.lrc.ky.gov provides information on each of Kentucky’s senators and representatives, including phone numbers, addresses, and committee assignments. The page also has summaries and full texts of bills under consideration, as well as information on the daily progress each bill has made through the legislative process.
 
By going to the LRC eNews page, www.lrc.ky.gov/pubinfo/listserv.htm, citizens can subscribe to frequent e-mail updates on what's happening at the Capitol. In addition, the General Assembly regularly posts news updates at www.lrc.ky.gov/pubinfo/capitol_notes.htm
 

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