Budget to overshadow 2014 legislative session


Associated Press

Posted on January 5, 2014 at 2:02 PM

Updated Sunday, Jan 5 at 2:02 PM

FRANKFORT, Ky. (AP) — Crafting a new state budget looms as the overarching issue for Kentucky lawmakers who expect spending demands to outpace available revenues as the state's economy slowly recovers from the recession that caused years of cutbacks.

Other headlining issues for the 2014 General Assembly session, which begins Jan. 7 and stretches until mid-April, will include efforts to legalize casinos and reshape Kentucky's tax code. Those two issues have drawn considerable attention but made little or no headway in the past.

Bills to change the state's eminent domain law, curtail heroin addiction and ease financial distress in the eastern Kentucky coalfields are expected to surface during the session's 60 working days.

Dominating the agenda, though, will be work on a new state budget for the two years beginning July 1.

Top lawmakers already are tamping down expectations.

"There's a pent-up demand from agencies, interest groups and others affected by government spending," said Senate Majority Floor Leader Damon Thayer, R-Georgetown. "I just don't see where it's realistic. The taxpayers aren't interested in putting up more money."

A group of the state's top economists recently forecast that modest growth in Kentucky's economy will add nearly $500 million in revenue to the state's General Fund budget by 2016. But Gov. Steve Beshear has warned that the additional cash won't be enough to cover the needs of state government. One big-ticket item is shoring up pensions for government retirees.

As a result, the funding constraints have the session shaping up as one of "low expectations," Thayer said.

Education funding will likely dominate the budget debate.

Kentucky Education Commissioner Terry Holliday has warned that school districts will have to cut teachers and teaching assistants if lawmakers fail to restore school funding cuts. The Department of Education has asked lawmakers for $336 million more in state funding for the 2014-16 budget to restore funding to pre-recession levels.

Beshear has said he's willing to push for unspecified budget cuts to find more money for schools.

"I am determined to reinvest in education with this upcoming budget," said Beshear, who will present his spending plan to lawmakers early in the session. "So if I have to cut some other areas to do it, then that's what I'm going to do."

Top lawmakers said they don't see a consensus yet for a plan to modernize the state tax code. The idea of creating a simpler code that generates enough revenue to meet state needs even during recessions has been talked about for years.

"That's a pretty sensitive subject when it gets right down to the nitty gritty," said House Speaker Greg Stumbo, D-Prestonsburg. "Everybody's for it until they see it, and then it becomes pretty tough. I don't see a real mood right now to do anything on that front."

Meanwhile, those who support legalizing casinos in Kentucky are mounting a new effort to get the issue on the ballot as a proposed constitutional amendment.

Two legislative leaders from Louisville have taken the reins in trying to navigate it through the legislature - Senate Majority Caucus Chairman Dan Seum, a Republican, and House Speaker Pro Tem Larry Clark, a Democrat.

Opponents are digging in again, leaving it difficult to assess the odds of getting a casino amendment on the ballot.

"Until there is some type of consistent message and position by all people related in the industry, it's hard for anybody to really delineate what they're going to be for, if they're going to be for it," said Senate President Robert Stivers, R-Manchester.

Lawmakers are reacting to a statewide surge in heroin overdose deaths by pushing legislation calling for tougher punishment for traffickers and more treatment for addicts. In recent years, lawmakers passed legislation to combat the rise in prescription drug abuse, synthetic drugs and methamphetamine production.

Now, prospects are good for a consensus to tackle the heroin binge, Stivers said.

Eminent domain has surfaced as an issue, stemming from a company's efforts to build a pipeline to pump natural gas liquids across Kentucky. Some lawmakers want to block the company from being able to use eminent domain law to condemn private property as part of the project.

"Along the planned route, there are several legislators from both parties with enough clout to pull a bill together and pass it into law," said Rep. David Floyd, R-Bardstown, one of the lawmakers working on legislation.

Senate Republicans will likely push voter identification legislation, as well as abortion-related measures such as requiring a face-to-face consultation between medical providers and women seeking abortions, Stivers said.

Stumbo said his top priorities will include efforts to assist the state's struggling Appalachian region, partly by increasing college attainment. He'll also push to raise the state's minimum wage from $7.25 to $10.10 an hour over three years.

Lingering in the background will be the upcoming elections, when all 100 House seats and half the Senate seats will be on the ballot.

House Democrats hold a 54-46 majority, which has been whittled by recent GOP gains. House Republicans are expected to try to flex more muscle, even as the GOP makes a strong push to win control of the chamber in the fall election.

"Having that number of members changes the dynamics on the (House) floor, changes the dynamics in the committee process," said House Republican Floor Leader Jeff Hoover.

Republicans have solid control of the Senate.

Senate leaders said they hope the bipartisan agreement reached last year to shore up Kentucky's pension plans for government retirees can serve as a model for Democrats and Republicans to seek common ground on more thorny issues.

"We feel like we set a new tone in the last session," Thayer said. "But every session has a life of its own."