House speaker not happy that Ky. Senate took construction projects out of state budget

Stumbo warns Ky. Senate action could hurt budget

FRANKFORT, Ky. — House Speaker Greg Stumbo delivered a harsh warning to Senate leaders on Monday, saying they are jeopardizing the state budget if they push ahead with a plan to cut out construction projects intended to kickstart the state’s economy.

Hours after Senate budget committee Chairman Bob Leeper announced a plan that includes deeper cuts across state government than in the House plan and elimination of numerous construction projects, Stumbo sternly objected. He said the $2.2 billion in school, water, sewer and other infrastructure projects will help the state out of economic recession.

Taking them out of the budget isn’t acceptable, Stumbo said. If they’re not put back in, he said, “we won’t have a budget.”

Leeper said the Senate spending blueprint for the next two years features cuts that are 1½ percent deeper than reductions made in the House plan in the first year. It would be followed by a 1 percent reduction in the second year, based on projections in the Senate plan. He said the main funding formula for elementary and secondary education were included in the cuts.

“We wanted to share the sacrifice to minimize the discomfort in various areas,” said Leeper, a Paducah Independent. “To do that, we went all the way across the board.”

The committee approved the spending plan Monday, and the proposal was expected to receive full Senate action later Monday.

The goal is to get the spending measure to a House-Senate conference committee as quickly as possible to let the conferees try to resolve the many differences in the two chambers’ versions, Leeper said.

The Democratic-controlled House passed a $17.5 billion two-year budget plan earlier this month mostly along party lines.

The House relied on budget cuts and other steps, plus $371 million in revenue enhancements in the next two years, to plug a more than $1 billion shortfall looming over the next budget.

Now the Republican-led Senate is getting its crack at the budget.

Leeper said the Senate budget drafters decided to keep the two instructional days that the House proposed eliminating as a way to save $72 million in the biennium.

“I think it sends a better message, without question, for education,” Leeper said.

State Education Commissioner Terry Holliday has raised deep concerns about dropping school days when Kentucky is competing for federal education grants. Kentucky was listed recently among 16 finalists in the first round of the U.S. Department of Education’s “Race to the Top” competition, which will deliver $4.35 billion in school grants.

“The commissioner is concerned it would be a black mark on our status as a finalist if we cut instructional days to save money,” said Department of Education spokeswoman Lisa Gross.

The House budget funded more than $2.2 billion in school, water, sewer and other infrastructure projects in mostly Democratic districts. It calls for borrowing some $1.3 billion for construction projects, and plans to borrow an additional $800 million for roads and other projects with pots of money other than the General Fund.

Leeper said the Senate plan would have a much smaller debt ratio for the state. School construction projects were dropped in the proposal, he said.

Senate budget writers also decided to drop the two main tax-code changes proposed in the House’s revenue-enhancement measure, he said.

Both proposals have been opposed by business interests. One would temporarily suspend tax write-offs for businesses reporting losses. The other would accelerate collection of sales taxes. The House plan did not raise tax rates.

The legislation is House Bill 290.