All Entries in the "State Budget" Category

State revenue dips in April, raising possibility of budget shortfall

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — State revenue declined 2 percent in April, highlighting the possibility of a budget shortfall in the final two months of the fiscal year.

Kentucky’s General Fund collections were down $16.5 million from April 2011, according to figures released Friday.

The state’s two-year budget calls for revenue growth of 2.4 percent this fiscal year, but meeting that target would require 3.6 percent revenue growth in May and June. If that doesn’t happen, the state will have to find additional money or make cuts to balance its books.

A recent revenue forecast conducted by the Office of State Budget Director predicted revenue growth of 2.1 percent for the fiscal year that ends June 30, said State Budget Director Jane Driskell.

Large declines in the sales tax, corporate income taxes and property tax collections hampered April’s revenue numbers, Driskell said.

“Continued weakness in the sales tax is particularly conspicuous since the national economy is improving and consumer confidence is growing,” she said.

Sales taxes fell 7.3 percent from the previous April. Corporate income tax collections fell 89.7 percent in April but have increased 2.8 percent year-to-date.

The state’s Road Fund, which relies primarily on gas and other transportation taxes, had one of its best months to date. Revenues were up 18 percent in April compared to April 2011. The state collected $143.1 million for the Road Fund in April, the most ever collected in a single month.

Richie Farmer’s lawyer asks for February trial date

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — An attorney for former Kentucky Agriculture Commissioner Richie Farmer wants a federal judge to push back Farmer’s July 2 trial date to February 2014, saying he needs more time to sort through voluminous records.

Farmer was indicted last month for allegedly misusing more than $450,000 in taxpayer funds. He has pleaded not guilty.

Guthrie True, a lawyer for Farmer, said in a motion filed Tuesday that federal prosecutors have given Farmer’s defense team 16 compact discs containing scores of records that could be used against Farmer at trial.

“This discovery includes hours of recorded interviews by the Kentucky Office of the Attorney General and the Kentucky Office of the Auditor of Public Accounts,” the motion says. “It will take considerable time for these interviews to be transcribed, read, and analyzed for information.”

Federal prosecutors have said the trial could last three weeks.

Beshear will decide on Medicaid expansion by July 1

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — Gov. Steve Beshear said Monday that he will decide by July 1 whether to expand Medicaid, the federal-state health care program for the poor, elderly and disabled.

During a Capitol news conference Monday on an unrelated topic, Beshear said his administration is looking at several factors, including cost, before deciding whether to expand the program that serves about 830,000 people in Kentucky.

It is estimated that more than 400,000 people in Kentucky could be eligible for the program if it expands to include people at 133 percent of the poverty level. For a single person, 133 percent of the poverty level is $15,000.

Beshear said he is getting a lot of pressure from the medical field — particularly hospitals — to approve the expansion. Many Republicans have opposed expansion, saying the state can’t afford it.

Beshear defends plan to reward school districts that raise dropout age

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — Gov. Steve Beshear on Monday defended a plan to give $10,000 grants to more than 50 school districts if they increase their dropout age from 16 to 18 in coming months.

“I think it’s money well spent,” Beshear told reporters during a news conference Monday on an unrelated topic.

House Minority Leader Jeff Hoover, R-Jamestown, sent Beshear a letter last week questioning why the state would spend $570,000 on the plan when there are so many other needs in Kentucky schools.

“I find it disturbing the Commissioner of the Department of Education is offering more than $500,000 in public education funds to advance this agenda while tens of thousands of children in Kentucky are desperately in need of textbooks,” Hoover said in his letter to the governor. “Ten years from now it will not matter that we have raised the minimum age for high school dropouts if we continue down this path of spending money which without a doubt no member of the legislature or the public was told was available.”

Beshear said Monday that money for the grants comes from a $570,000 fund that is earmarked to help keep kids in school longer.

“The money comes from dropout prevention monies that have been appropriated to the department, so it’s exactly what the money should be spent on,” Beshear said. “The money could not be used for textbooks anyway.”

State revenues up slightly for March, revenues for road projects down

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — State receipts were up slightly in March compared to the previous March but revenues used to fund road projects were down for the first time since November, numbers released Wednesday show.

Revenue collections grew o.4 percent — an increase of $3 million — from March 2012, according to the Office of State Budget Director. Total revenues for March were $735.8 million compared to $732.8 million the previous March.

“Religious freedom bill” heads to Senate

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — A bill that would strengthen people’s ability to ignore Kentucky regulations or laws that violate their religious beliefs is now headed to the Republican-controlled Senate.

On Friday House Bill 279 passed the Democratic-controlled House 82-7 with 11 members not voting on the bill.

House approves pension overhaul and funding bills, but legal questions raised

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — The House passed its version of a state pension overhaul bill Wednesday, along with a proposal to help fund the ailing pension system by expanding the Kentucky Lottery and instant racing at horse racetracks.

The funding measure — House Bill 416 — received 52 “yes” votes and 47 “no” votes, but it fell well shy of the 60 votes needed for a revenue-generating bill to become law in this year’s 30-workday legislative session.

Senate President Robert Stivers, R-Manchester, said Wednesday that the Senate will not accept the bill because it did not get 60 votes.

“It is my position that this action would submit the entire process to a legal challenge based on constitutional grounds,” Stivers said. “Revenue bills in odd-year sessions must be passed with a three-fifths majority vote. Based on that, the Senate cannot accept the bill due to its being unconstitutional and therefore out of order.”

House Speaker Greg Stumbo, D-Prestonsburg, argued that HB 416 would only need 60 votes when it is returned to the House for final approval after passing the Senate. Stumbo cited a court case that defined “final passage” of a bill as the last vote it receives.

House passes DNA pre-conviction bill

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — A bill that would allow for collection of DNA samples at the time of arrest passed the House on Thursday, despite questions about the constitutionality of collecting DNA prior to a conviction.

House Bill 89 passed the House 68-27. A similar bill has passed a Senate committee but has not yet been voted on by the full Senate. House Bill 89 would allow police to collect DNA evidence at the time of a felony arrest. That information would then be placed in a database. Police and prosecutors could run that DNA evidence against biological evidence collected from unsolved crimes.

Advocates urge legislature to restore child care money for poor families

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — Child advocates urged members of a Senate panel Wednesday to find money in Kentucky’s cash-strapped budget to reverse cuts to a program that helps poor parents pay for child care.

When the spending cuts take effect in April, many parents will lose their jobs, kids will be placed in dangerous child care settings and some rural child care centers could close, advocates told the Senate Health and Welfare Committee.

“If they lose their subsidy, they lose their job,” said Gerry Roll, of the Foundation for Appalachian Kentucky.

Starting in April, no new applicants will receive child care subsidies. In July, the income guidelines will be tightened so only the poorest families will receive child care subsidies.

About 8,700 families — a third of those receiving the subsidy — will be cut from the program when the maximum allowed income for a family of four drops from $33,075 to $22,050. An additional 2,900 families per month will be denied access to the program because of the moratorium, the state estimates.

Senate panel OKs bills requiring legislative approval for Medicaid expansion, health benefit exchange

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — Gov. Steve Beshear would need the legislature’s permission to expand Medicaid or implement key parts of the federal Patient Protection and Affordable Care Act under two bills approved Wednesday by a legislative panel.

Senate Bill 39 would require legislative approval to expand Medicaid, the state-federal health care program for the poor and disabled. Senate Bill 40 would require Beshear to get the General Assembly’s approval before starting a state-run health benefit exchange, an online insurance marketplace for people to buy insurance. The exchange is a key part of President Barack Obama’s Affordable Care Act.

The vote on the bills split along party lines. Seven Republicans voted for the proposals and three Democrats opposed them. There was no debate on either bill.

Beshear, a Democrat, created the health benefit exchange this summer by executive order. It is scheduled to go live on Jan. 1, 2014.

Republicans have repeatedly tried to block the health benefit exchange, raising questions about the cost of implementing the program. The Beshear administration has used federal grants to pay for start up costs. Administration officials have said an existing tax on insurance companies will be used to pay for ongoing operating costs.

Expanding Medicaid eligibility — also part of Obama’s health care legislation — to an additional 400,0000 Kentuckians is expected to happen in 2014. The federal government will pay all of the additional costs in the first three years and 90 percent of the cost in the fourth year.

“This is going to be an expensive endeavor,” Sen. Julie Denton, R-Louisville, said of the reason she sponsored both bills. “We need to have input.”

“This is in no way a slight to the governor,” Denton said.

SB 39 and SB 40 now go to the Senate for consideration.