Balancing the Budget in Kentucky

On the left side of the scale:

Every House member up for election in November.

On the right side are such lightweight issues as:

Hundreds of millions in structural imbalances
Decreasing revenue due to outmoded tax structure

Ability to procrastinate by cobbling

together a budget for the first year
Dreams of more federal dollars
State Programs cut

State planning damaged
But Special Projects funded

Special Session in 2011...

after the election

Is that about right?

This from WAVE 3 TV:

Budget writers still working on plan

A leading House budget writer says nothing is safe from possible budget cuts as Kentucky lawmakers look to plug a massive shortfall for the state's next budget.

House Appropriations and Revenue Committee Chairman Rick Rand told reporters Tuesday that it appears there will be no new revenue to help balance the next two-year budget.

Rand said top House budget writers are still considering several options, but said lawmakers will consider everything when looking at possible budget cuts.

He listed funding for elementary and secondary public schools as the last place lawmakers would look in seeking budget cuts. He also downplayed tapping school contingency funds.

A slowdown in tax collections caused by the recession has led to a projected $1.5 billion shortfall over the next two-year budget cycle.

Stumbo says he’s open to tax reform

On the heel sof his recent stinko idea...Greg Stumbo has now found a good idea to latch onto.

This from Bluegrass Politics:

A key lawmaker told members of the state House Tuesday that spending on schools, prisons and Medicaid likely will get chopped in the upcoming two-year state budget.

Those bedrock functions of government, which account for about two thirds of state General Fund spending, have been largely off-limits during five previous rounds of budget cuts since Gov. Steve Beshear took office in 2007.

After the pronouncement by House budget committee chairman Rick Rand, which came during a three-hour informational meeting for House members, House
Speaker Greg Stumbo said he is “not afraid” to consider tax reform to keep the state from making crippling cuts in education and human services.

Stumbo, D-Prestonsburg, said he believes the public and state lawmakers might embrace an overhaul of the state’s tax system to avoid huge cuts in education and human services.

Told by a reporter that Beshear and many legislators don’t seem to have an appetite for tax increases, Stumbo responded: “I don’t have an appetite to turn my back on the needs of our state.”...

House to hold hearings on tax reform soon

This from Bluegrass Politics:

FRANKFORT — House leaders said Monday that they plan to hold hearings soon on two tax overhaul bills in preparation for a possible special legislative session this summer.

Rep. Rick Rand, D-Bedford, chairman of the House Appropriations and Revenue Committee, said Monday that hearings on two tax reform bills as well as other discussions about the condition of the state’s finances could take place as early as late April.

“The prospects for our next budget cycles are not rosy,” Rand said. “We want to make sure that we are prepared to make any decisions that we may have to make.”

The General Assembly just adjourned on Thursday. But talks of tackling tax reform — or looking at the way Kentucky generates revenue — started early in the 2009 session after the General Assembly passed a combination of cuts and increases in cigarette and alcohol taxes as a way to plug a $456 million shortfall. Many legislators, in speeches on the floor and privately, said the state could no longer balance its books on the backs of just a few industries.

And many say next year’s budget shortfall could be even greater as the state’s revenues continue to decline. Gov. Steve Beshear said last week that he has not yet decided whether to call a special session to address a potential shortfall.

The legislature has kicked around tax reform since Gov. Paul Patton’s tenure in the 1990s, but the measure gained steam when a 2002 report showed that Kentucky’s tax structure was structurally unsound–meaning it did not raise enough revenue to support the services the state had in place. The state uses a tax structure more suited to the industrial age and did not address or tax the growing service sector, the study found...

Good. And while they're at it, perhaps they can remove the inherently disequalizing property tax as the basis for funding Kentucky schools.

Farris Talks Budget to A&R

Interim Commissioner Elaine Farris takes to "the hill" today to chat with House and Senate Appropriations and Revenue committees.

She is scheduled for the Senate A&R in a little less than an hour - 10:15 am - Room 149, Capitol Annex; and later this afternoon with the House A&R - 3:15 pm - Room 154, Capitol Annex.

The proceedings can be viewed at KET.

Follow along with the Commissioner's presentation here.



This from Ronnie Ellis in the Ashland Daily-Independent:

Lawmakers start review of budget shortfall
70 cent cigarette tax in doubt

FRANKFORT — Gov. Steve Beshear hopes lawmakers produce a solution to a projected $456 million shortfall in state revenues quickly – but it might not get it done as quickly as he’d like.

“If we can get to the end of this process by the end of this month in terms of information gathering,” Beshear said Tuesday afternoon, “and talk about some solutions we can agree on, hopefully by the first week or so of February, we can have this problem solved so we can move on to other areas.”

But Senate Appropriations and Revenue Chairman Charlie Borders, R-Grayson, said earlier that lawmakers “recognize the complexity of the problem” and plan to review carefully the state budget and Beshear’s proposals to deal with the shortfall. That began Tuesday with a presentation by Beshear’s acting Budget Director John Hicks before a joint meeting of the Senate and House A&R committees.

Both committees will meet separately throughout the day Wednesday and Thursday, hearing from cabinet secretaries about what impact the budget reductions may have. New House A&R Chairman Rick Rand, D-Bedford, said the committees plan to convene at 9 a.m. and work until late in the afternoon both days...

House A & R Chair goes to Rick Rand

This from Page One Kentucky, Photo of Carl Rollins:

A&R, Rick Rand, (Carroll, Henry, Oldham, Trimble- click here for the full A&R committee list)

Education, Carl Rollins (Fayette, Franklin, Woodford)

Health & Welfare, Tom Burch (Jefferson)

And Jake suspects all three "may have lied to Richards and/or Stumbo about their support..."