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Senate approves budget plan with cuts; Stumbo rejects it

UPDATED AT 5:49 P.M.

By Beth Musgrave and Jack Brammer
bmusgrave@herald-leader.com
jbrammer@herald-leader.com

FRANKFORT — House Speaker Greg Stumbo said Thursday that the Senate’s plan to fix the Medicaid budget with $101 million in cuts across state government is unacceptable and probably means the issue will not be resolved in the special legislative session.

“It’s obvious the majority of the Senate doesn’t want to solve this problem,” Stumbo said, adding that he expects Gov. Steve Beshear will have to reduce reimbursement rates for health care providers by 35 percent on April 1 to address the Medicaid budget.

The full Senate voted 22-15 on Thursday to pass its version of House Bill 1. All of the Senate Democrats voted against the measure. Sen. Carroll Gibson, R-Leitchfield, did not vote.

The plan would rely on some savings in the state Medicaid program but would also require cuts of about 0.355 percent in the remaining months of the current fiscal year, which ends June 30th. Most parts of state government would be cut 1.74 percent in the second year of the state’s two-year budget.

UPDATED: Senate likely to vote Thursday on Medicaid budget fix

Janie Miller, secretary of the Cabinet for Health and Family Services

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — Members of the Senate budget committee grilled Cabinet for Health and Family Services Secretary Janie Miller Wednesday on how the state would document planned savings in the $6.5 billion Medicaid program.

Miller told the Senate panel that when the cabinet enters into contracts with managed care programs sometime after July 1, the cabinet will be able to tell how much it will pay per Medicaid patient. Under the current system — which pays fees based on services provided — the costs are not known. Many managed care programs are paid a set rate per patient, regardless of how many health care services the patient uses.

“I am confident that we will be able to generate the savings,” Miller said, after repeated questions by many Senate Republicans on how much savings the managed care programs will generate.

How the new managed care programs will generate savings is key to a compromise budget passed by the House on Monday. Under House Bill 1, if the state can not demonstrate that it has generated more than $116 million in savings through managed care and other efficiencies by Aug. 15, there will be across-the-board cuts in most areas of state government by Oct. 1. Education would be exempt from most of those cuts.

Senator: Kentucky shouldn’t give up on nuclear power

State Sen. Bob Leeper, I-Paducah

By John Cheves — jcheves@herald-leader.com

FRANKFORT — Although Kentucky is known to experience earthquakes, the explosions and radiation leaks at a nuclear power plant in earthquake-ravaged Japan should not discourage the state from expanding into nuclear power, state Sen. Bob Leeper, a Paducah independent, said Monday.

For the past three years, including the just-concluded 2011 legislative session, Leeper has sponsored bills that would repeal the state’s moratorium on the construction of nuclear power plants in Kentucky. His latest effort passed the Senate 31-5 on Feb. 8 but died for lack of action in the House.

“It’s way too early to talk about throwing in the towel,” Leeper said Monday.

“As with any other disaster, you’ve got to see how everything plays out,” Leeper said. “You’ve got to wait and see what works and what doesn’t work. It’s too early to determine whether or not this makes the case that we can safely develop nuclear energy.”

With clock ticking, Ky. lawmakers still debating many high-profile bills

By Beth Musgrave and Jack Brammer – bmusgrave@herald-leader.com

FRANKFORT —With time running out on this year’s legislative session, Kentucky lawmakers still haven’t reached an agreement on balancing the state’s Medicaid budget.

House Speaker Greg Stumbo told reporters on Friday that passing House Bill 305, which balances the Medicaid budget, is the one issue that must be rectified before the legislature adjourns. Monday will be the 23rd day of the 30-day legislative session.

“The budget issue is my main concern,” Stumbo said. “We have to fix that problem.”

So far, only a handful of proposals have cleared both the Republican-controlled Senate and the Democratic-controlled House. Still on the drawing board are dozens of high-profile bills that would overhaul the state’s criminal code, increase the dropout age from 16 to 18, require a prescription for common cold medicines used to make meth and change the state’s immigration laws, among other things.

State official: Medicaid on track for $86.5 million savings

Janie Miller, secretary of the Cabinet for Health and Family Services

By Beth Musgrave – bmusgrave@herald-leader.com

FRANKFORT — The state’s health program for the poor and disabled is on track to save $86.5 million this year, said Kentucky’s top health official.

But the state still doesn’t know how much of that savings it has achieved so far.

Cabinet for Health and Family Services Secretary Janie Miller told a House budget sub-committee on Wednesday that it was difficult to say exactly how much of the $86.5 million in projected savings that Medicaid cost-saving measures have generated.

How much the state has saved is a key sticking point in a budget bill pending before the General Assembly.

Some delinquent Kentucky taxpayers get a break

Gov. Steve Beshear

By John Cheves – jcheves@herald-leader.com

About 2,000 delinquent Kentucky taxpayers — mostly businesses — will get a break under the revenue bill the General Assembly passed on Friday during its special session.

Tucked into House Bill 2 were two sentences that will erase millions of dollars in penalties, interest and fees owed by the delinquent taxpayers if they had a protest pending at the Revenue Department by Jan. 19 of this year and if they agree to pay the original sum of taxes they owed no later than July 31.

“These are incentives to reach a very targeted, very limited number of individuals who are in the protest resolution stage,” said Jill Midkiff, spokeswoman for Gov. Steve Beshear, who asked for the measure.

The state expects to collect $15.5 million in taxes as a result of the limited amnesty, said Revenue Department spokeswoman Cindy Lanham. Many of the eligible taxpayers have delinquency cases up to five years old, she said.

The department cannot estimate how much money will be forfeit because the penalties, interest and fees can vary widely depending on the circumstances of a delinquency and how long a case has gone on, Lanham said.

Senate panel makes changes to budget bill

By Beth Musgrave and Jack Brammer – bmusgrave@herald-leader.com

FRANKFORT — The Senate budget committee made several changes to a proposed two-year spending plan for the state late Thursday before unanimously approving the more than $17 billion budget.

Unlike the budget bill that cleared the state House earlier this week, the Senate proposal includes money to replace some of the state’s most dilapidated school buildings, mandates changes to the state employees’ health insurance plan and nixes funding for a private Christian school in Breathitt County.

The full Senate is expected to take up the budget Friday, which is expected to be the last day of a special legislative session that began Monday. Once the Senate approves its version of House Bill 1, leading lawmakers from both chambers will have to quickly compromise on their differences in order to adjourn late in the day.

Senate Budget Chairman Bob Leeper, I-Paducah, said after Thursday night’s vote that school districts opting to increase property taxes would be given money from the state to build those schools. It’s not clear how much money would be available.

Senate panel approves revenue measure with new tax credits

State Sen. Bob Leeper, I-Paducah

FRANKFORT — A Senate committee on Thursday passed a bill designed to generate revenue over the next two years despite not knowing how much money the bill would raise for the cash-strapped state.

The Senate Appropriations and Revenue Committee voted unanimously Thursday to pass House Bill 2, which cleared the House on Wednesday. Through a series of cost-cutting measures — including caps on state tax incentives — the House version of the bill would generate about $88 million over the next two years.

But the Senate attached four different tax credits to the revenue measure, including easing requirements on an environmental tax credit targeted at Toyota. Some of those business tax credits will not take effect for the next several years, including the tax credit for Toyota, Senate leaders said Thursday.

Senate Budget Chairman Bob Leeper, I-Paducah, said he wasn’t sure how much revenue the Senate version of the bill would raise but said it’s unlikely that the tax credits added by the Senate would dramatically decrease the amount of money generated by House Bill 2.

Leaders will discuss law-making session on ‘Kentucky Tonight’

Four state legislative leaders are scheduled to appear on Monday’s edition of “Kentucky Tonight” with host Bill Goodman to discuss the 2010 General Assembly.

They are Senate President David Williams, R-Burkesville; House Majority Leader Rocky Adkins, D-Sandy Hook; Senate budget chairman Bob Leeper, I-Paducah; and House budget chairman Rick Rand, D-Bedford.

The show will air at 8 p.m. EDT MOnday on KET and at www.ket.org/live.

Senate approves state budget, road plan

Senate President David Williams, R-Burkesville

By Beth Musgrave, Jack Brammer and Ryan Alessi – bmusgrave@herald-leader.com

FRANKFORT — The Kentucky Senate passed its version of a $17.3 billion, two-year state budget Monday night that cuts deeper than the House’s proposed spending plan and axes nearly $1 billion in school, water and sewer projects.

The Senate approved House Bill 290 on a 35-2 vote, with one lawmaker declining to vote.

House Democratic leaders said the Senate’s decision to drop almost $1 billion worth of construction projects — which the House said would create 25,000 jobs — may mean lawmakers end the 2010 legislative session without approving a budget.

“If it’s a budget buster it’s a budget buster,” said House Speaker Greg Stumbo, D-Prestonsburg. “We’re so committed to the Kentucky Jobs for Kentucky Families (plan) and creating 25,000 jobs that we may have to leave here without a budget.”

A conference committee made up of House and Senate leaders will be formed in coming days to hammer out differences between the two chambers’ budgets. If they hope to override any vetoes by Gov. Steve Beshear, lawmakers will need to vote on a compromise by the end of next week.

The Senate cut an extra 1.5 percent from nearly all areas of state government, slicing deeper than the 2 percent cuts the House had proposed for many agencies. The only area that appears to be exempt from those cuts was the Department of Revenue, which has argued that cutting its budget could limit the amount of money it collects for the state.

The Senate also replaced two school days that were cut under the House plan, instead trimming the main funding formula for schools by 1.5 percent in the first year and 1 percent in the second year of the budget.