| Legislative Research Commission: Budget Press Release |
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Legislative Research Commission
For Immediate Release
April 3, 2008
Final budget passed, heads to governor
FRANKFORT — Kentucky's $19 billion budget plan has been sent to the governor's office after final passage late Wednesday night by the General Assembly.
The Senate passed House Bill 406, the state's two-year spending plan, on a 35-3 vote; the House followed suit on a 74-21 vote.
The final report, the result of a weeklong House-Senate conference, includes no new taxes, but restores most of the funding the governor proposed cutting in higher education.
Base school funding for public schools is maintained, as is textbook funding for elementary and secondary education and programs like Safe Schools and Read to Achieve.
"The fact is, this is a very good budget considering the conditions in which we find ourselves," said Senate budget committee chair Charlie Borders, R-Russell. The legislature tapped $400 million in previously unavailable resources, from debt restructuring to savings due to a coming wave of state employee retirements. The Kentucky Lottery will also be required to increase its payments to the commonwealth by $7 million per year, 28 percent of its revenues.
"For the first time in memory, we will have a budget where in both years of the biennium, spending is less than in the current baseline," said Senate Minority Floor Leader Ed Worley, D-Richmond.
House Appropriations and Revenue Committee Vice Chair Rep. Robin Webb, D-Grayson, said the budget is a result of "fiscal crisis times."
"We're struggling in recession, our federal funding has been cut across the board. It's hard to maintain--even think about maintaining--continuation of services...when our moneys are being diverted billion by billion by billion, day in and day out," Webb said.
The bill would provide $90 million in new dollars for health and human services programs including 100 new Supports for Community Living slots that provide alternatives to institutionalization for those with developmental disabilities and additional SCL slots for those with acquired brain injuries. It would also approve construction of a new Eastern State Hospital in Lexington and new group homes at Hazelwood Center in Louisville, although House Health and Human Services budget subcommittee chairman Rep. Jimmie Lee, D-Elizabethtown, said those projects would require no General Fund dollars from the budget.
In the area of corrections, the state expects to save $31 million by moving non-violent offenders, generally Class D felons serving five years or less, out of prison and into community programs. The budget also provides $2 million in coal severance money for Operation UNITE, an anti-drug program focused on eastern Kentucky , and $1.8 million in coal severance money for drug courts in coal-producing counties.
Capital construction was largely limited to safety, health, and other emergency needs, including needs at Fort Knox , which will be greatly expanding in the near future. Money to prepare for the 2008 Ryder Cup in Louisville and the 2010 Alltech FEI World Equestrian Games in Lexington was also included, as was funding for enhanced school construction. The final debt ratio will be 6.32 percent of state spending.
Teachers and state employees will receive 1 percent raises in each year, but if state revenues outpace projections, those raises could be as much as 3 percent in the second year. If revenues exceed expectations by just 1 percent, Senate President David Williams said, the full raise would be realized and several other projects, mostly at universities, could begin. Any additional money would go toward the state's rainy day fund, currently projected at $32 million.
Lawmakers also approved a supplemental appropriation bill, House Bill 410. The bill, which passed 38-0 in the Senate and 83-10 in the House, includes $150 million in bond funding from coal and tobacco accounts for water and sewer projects as well as $231 million in federal GARVEE Bond funding for the Louisville bridges project. Also in that bill are line-itemed coal severance projects that were essential to the final compromise.
"I think we can get $1 billion in projects going in this state," said Williams, R-Burkesville, by leveraging funds in HB 410 with other resources.
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