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House panel passes $19.5 billion budget, 26-2

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — The Kentucky House will likely vote Wednesday on a two-year, $19.5 billion state budget that calls for 8.4 percent cuts to some parts of government and very little new borrowing for capital projects.

The House Appropriations and Revenue Committee voted 26-2 on Tuesday to approve House Bill 265, the executive branch budget. The House made some modest tweaks to Gov. Steve Beshear’s proposed budget, which was introduced in January.

The latest proposal scrapped more than $450 million in bonds for universities over concerns about the state’s rising debt. The House budget also nixed a 1.5 percent cost-of-living increase for state retirees, which could save the ailing pension fund about $400 million, state officials said Tuesday.

Beshear said he was reviewing the House’s changes.

“As we said in January, this is a very difficult budget,” Beshear said. “It appears the House budget will not vary significantly from the budget I introduced. We will review the proposed changes carefully, and will work with both the House and Senate as the budget moves through the process.”

Ban on texting while driving clears House panel

State Rep. Jody Richards, D-Bowling Green

FRANKFORT — Legislation that bans all drivers from text messaging while behind the wheel and outlaws any cell phone use by drivers under the age of 18 cleared its first legislative hurdle on Tuesday.

House Bill 43, sponsored by Democratic Rep. Jody Richards of Bowling Green, passed the House Transportation Committee 18-7, but not before generating questions and comments from many committee members. Some expressed concern that the bill didn’t treat all driving distractions in the same way.

Rep. Jim DeCesare, R-Bowling Green, questioned why the bill allowed drivers to check global positioning systems on their phones. And he didn’t like that it exempted law enforcement agents from the texting ban.

“It’s not going to stop ‘Joe Police Officer’ for getting a text from his wife telling him to bring bread home when the guy at the light next to him can’t,” DeCesare said.

A citizen’s guide to issues before the 2010 General Assembly

A $1.5 billion deficit in the next two-year state budget tops the 2010 Kentucky General Assembly’s agenda, but dozens of other proposals, dealing with everything from child pornography to industrialized hemp, will compete for lawmakers’ attention. The legislative session begins Tuesday.
Here are some of the top issues lawmakers will consider.

Budget and taxes

Topic: State budget

Details: The Kentucky Constitution mandates that lawmakers approve a two-year budget no later than April 15. To continue spending $9.1 billion a year from the General Fund, legislators will have to find an extra $890 million in revenue over the next two fiscal years. In addition, Democratic Gov. Steve Beshear says the state has at least $600 million more in new expenses that must be paid for in the next budget.

Hurdles: Ultimately, a small group of leading lawmakers from both chambers will negotiate details of the budget during closed-door sessions in early April. Until then, no potential spending cut or tax increase can be ruled out.

Topic: Tax overhaul

Details: A variety of proposals to overhaul the state’s tax system are percolating as potential solutions to the $1.5 billion deficit that lawmakers face in the two-year budget. Senate President David Williams, a Republican, has signaled a willingness to consider the idea of abolishing the state income tax and replacing it with higher consumption taxes, such as the sales tax. House Speaker Greg Stumbo, a Democrat, has said he’d rather overhaul the tax structure than make deep cuts to education. Some lawmakers have proposed taxing more services — including attorney fees and auto repairs — and raising taxes on the rich.

Hurdles: Democratic Gov. Steve Beshear, who already has declared his intention to run for re-election in 2011, says that now is not the time to raise taxes on families and businesses struggling with a recession. Also, half of the members of the state Senate and all of the House members face re-election in 2010. They’ll be reluctant to vote for any bill that raises taxes.

Constitutional amendments

Topic: Expanded gambling

Details: A proposal by Sen. Damon Thayer, R-Georgetown, would allow voters to change the Kentucky Constitution to permit electronic slot machines in counties with horse racetracks.

Hurdles: The horse industry has rejected Thayer’s proposal as “too little too late.” It prefers a bill that would allow slots at racetracks without a change to the Constitution, but that proposal has previously died in the Republican-led Senate. Compromise seems unlikely.

Fate of remaining legislation in hands of House Democrats

FRANKFORT — As the General Assembly returns to Frankfort on Thursday for two final days of the 2009 session, the fate of several pieces of legislation are in the hands of the House Democratic caucus.

The caucus is expected to meet sometime after noon, when the House gavels in.

House Speaker Greg Stumbo, D-Prestonsburg, said earlier this week that he will allow the caucus to decide whether to suspend House rules that say the final two days of the session will only be used to override any potential gubernatorial veto.

Alcohol officials fight higher taxes, plan rally

FRANKFORT – Officials with the alcoholic beverage industry are putting on a full press defense against proposals to raise taxes on their products. They plan to hold a rally at 2 p.m. Tuesday at the Capitol to protest any higher taxes on alcoholic beverages.

State lawmakers are considering raising the tax on alcoholic beverages, either on the wholesale or retail level, and increasing the state’s cigarette tax by as much as 50 cents a pack to produce a balanced budget.

Peak of power outages hit 769,000 homes, businesses

Last week’s ice storm knocked out electricity to nearly a third of Kentucky power customers, smashing the previous state record for outages that was set just four months ago.

About 769,353 homes and businesses were without power at last week’s peak, which came late on Jan. 29.

Medicaid deficit grows

FRANKFORT– State officials said Wednesday that the Medicaid deficit has ballooned to $231.8 million, up from $183 million state officials had originally projected for the federal-state insurance program.

Cabinet for Health and Family Services Secretary Janie Miller told a House budget committee Wednesday that the state’s portion of that deficit was approximately $69.5 million.

That $69.5 million deficit is not included in the current projected $456 million shortfall that the legislature is trying to determine how to rectify.

Stumbo recalls long political career as he takes Speaker’s gavel

FRANKFORT – As a Floyd County eighth-grader in 1964, Greg Stumbo was elected Speaker of the House in a Youth Assembly meeting in the state Capitol.

At age 57 Wednesday, Stumbo took the gavel as the Speaker of the House in Kentucky’s 2009 General Assembly to thunderous applause and cheers.

Stumbo and Williams at odds on slots at tracks

FRANKFORT — Newly elected House Speaker Greg Stumbo is pushing legislation to allow video lottery terminals year-round at the race tracks but Senate President David Williams says he opposes any expansion of gambling in the state.

Williams, R-Burkesville, said he sees no sentiment for expanded gambling in the Republican-led Senate and doubts it would pass the Democratic-controlled House.

Stumbo unseats Richards for House top spot

FRANKFORT — Kentucky lawmakers are spending the first day of the 2009 General Assembly electing their leaders for the next two years, with the most closely watched race between Democrats Jody Richards and Greg Stumbo for House speaker.

Richards, who has held the top spot in the House since 1994, and Stumbo, a former attorney general and House majority leader, expressed confidence. House Democrats will meet at 3 p.m. to vote.