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To Budge or Not to Budge - The Kentucky 2016 Budget Impasse

Watching the Kentucky General Assembly in any budget session is a nail biting activity. No matter what party the participants belong to, crafting a budget is, even in best of times, a study in brinkmanship. In recent years, the budget debate was postponed until the governor calls the legislature back into special session to deal with the budget- to howls bemoaning the cost to taxpayers and "why can't they get along?"

Conflict is inevitable. The executive and legislative branches of government have different priorities and answer to different dog whistles. While the governor comes into office with promises to keep, legislators come from all corners of this large and diverse state with hometown voices ringing in their ears. Finding the perfect balance with a constitutional mandate that the budget balance (unlike the federal government) is an exercise in delicate diplomacy.

As April 12th, the last day of the regular session, approaches and the session winds down, passage of a budget looks impossible. Governor Bevin presented a budget that will affect every Kentuckian. Across the board cuts of 9% over two years in a state government that silently suffered cuts under Governor Beshear to keep the doors open, will be a blow that state agencies will take a decade to recover from.

It is a budget that pits grandma against junior. If grandma wants her state or teacher's pension, junior will face tuition increases. It's an ugly conflict that will be difficult to find a solution that pleases both generations.

Jane Driskell, Beshear's budget director, addressed the pension issue in an editorial "Bevin's budget slashing Kentucky's future."

Driskell said, "No one doubts that the unfunded liability in Kentucky Teachers' Retirement System is a problem. And, yes, it needs more money... But the pension system need not be a vacuum cleaner that sucks up all funds at the expense of other priorities."

The choice of the governor to sound all hands on deck because of the teacher pension issue is viewed with some skepticism. As one wag put it, "Do you sell your house to pay off your credit cards? If you do, you don't have a credit card debt - but you are homeless."

Chris Tobe, author of "Kentucky Fried Pension" watches the process with a sardonic eye. When asked about the budget, he wrote "Governors have been using the pension for budget relief the past 10 years. Last budget cycle Beshear raided (or borrowed) from Teachers Pensions $500 million a year to plug budget holes. Bevin's budget raids (or borrowed) from Teachers Pensions only $200 million a year to plug budget holes."

Is this a serious attempt to fix teacher pension shortfalls, Tobe was asked.

"I do not think Bevin cares about the pension, he is just putting in the minimum he can to avoid the State being downgraded again. ( In August 2015 S&P for the first time downgraded the entire State from AA to A)."

Not so long ago, it was state retirement that threatened to sink the state budget. Beshear and the Legislature crafted an answer with a bipartisan bill. Imperfect as it is, the compromise addressed at least some of the problems of state retirees. Of course, no one was happy with the compromise - that's the nature of compromise.

There does not look to be a working out between the Governor and a Democratically controlled House. If the House changes hands, I still have to wonder if there will be a compromise between a GOP controlled House and the Governor's office. Governor Bevin took to his Facebook page to post a video vowing no changes to the budget. The Governor continues to appeal to his constituency, tea party conservatives. What he isn't remembering is that many of those conservatives are grandmas or parents of college, university age students. They may have a different view when its their pocketbooks that get tapped to make up for a budget shortfall.

If the Republicans get their fondest wish and flip the House either on March 8th or May or in November, will GOP leaders be willing to tell constituents that school and higher education funding is cut to satisfy grandma's teacher retirement?

Maybe. Then it will be their problem - not Greg Stumbo and the Democrats.

We can't see a budget passing during the General Session.

Be prepared to howl about the cost of a special session. Again.


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