Senate reduces spending in 2-year budget

From the Legislative Research Commission:

For Immediate Release
March 23, 2012

Senate approves two-year budget plans

FRANKFORT — The Kentucky Senate approved its version of the state’s biennial budget plan yesterday by a 32-4 vote.

House Bill 265, as amended by the Senate, is similar to the budget that cleared the House two weeks ago. The plan includes 8.4 percent cuts on nearly all agencies over the next two years. This is on top of 10 rounds of budget reductions since 2007. Critical areas, such as Medicaid, are exempt from the cuts.

Base-line school funding remains, along with an additional provision for school districts suffering damage from the recent tornadoes. The Senate included a waiver for up to ten school days that students missed due to storm damage, as well as a special process to calculate SEEK funding in the 2012-2013 school year, for those districts.

Most of the changes made by the Senate to HB 265 were aimed at reducing the state’s overall amount of authorized bonded indebtedness. The governor’s original proposal included $968 million in debt that was reduced to $552 million by the House. The Senate reduced that amount even further to $391 million by removing bond funds for several projects, including $20 million previously allocated for the High-Tech Construction Investment Pool and $25 million for the maintenance and renovation of the state’s public school buildings and facilities.

The Senate plan also mandates a reduction of nearly $100 million over the next two years in contract expenditures by the governor. It increases the Budget Reserve Trust, or ‘rainy-day’ fund, to nearly $129 million by the end of the biennium.

The Senate concurred with a handful of funding increases in the House plan, such as providing additional money to reduce the caseloads of frontline social workers. Both plans also include more than $4 million total for the expansion of the state’s KASPER prescription-drug monitoring program. While it approved funding to boost revenues for the Kentucky State Fair Board, it cut additional funding in the House-approved budget for the Horse Park.

Legislative and judicial branch operational budgets, included separately in House Bills 268 and 269, respectively, were approved unanimously. Those branches of government would also face a full 8.4 percent cut.

Salary and cost of living increases for state employees and retirees in all three branches were excluded.

The budget plan will now be considered by a conference committee comprised of members of both chambers working to hammer out differences in their versions of the bills.

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Click here for a detailed summary of the Senate changes prepared by the Legislative Research Commission’s budget staff.