State’s budget reduces agencies’ funding but protects education

-A A +A

By the time you read this, the 2012 General Assembly will be one day away from concluding.

We have completed 59 days of the 60 day session, the last day, April 12, is reserved for considering any governor’s vetoes, if any.

 By far, working on the state’s two-year budget was the most pressing issue this week.

After several late nights, we reached consensus on the $19.4 billion budget with the House negotiators a little before 3 a.m. on Thursday.

It was a hard-fought point but for the first time in recent memory, Kentucky will not bond for current expenses.

Additionally, the Senate insisted on minimizing using one-time resources for recurring operating costs.

If the economy improves, the state is prepared to reach that better day quicker. If our revenues suffer, Kentucky’s landing will be cushioned.

 We purposed ourselves to keep our belt tightened regardless of the pressures.

There are many good and worthwhile programs out there but the fact is we simply cannot afford it; we do not have the dollars. So, we did the best we could and made the same sorts of decisions occurring around kitchen tables across the commonwealth.

This final budget includes those unavoidable 8.4 percent reductions for most state agencies that the governor recommended, with exemptions for critical areas such as Medicaid and Corrections. State universities would see a 6.4 percent reduction, and K-12 schools would receive full base-line funding. 

State employees will receive no raises. The governor is required to find $40 million a year in efficiencies. We also significantly reduced the state’s structural imbalance to under $200 million.

The final budget contains less debt than either the governor or the House proposed and more money in the rainy day fund. 

The state’s six-year road plan, which includes $3.7 billion over the next biennium for the repair and maintenance of Kentucky’s roads, is still being considered in a conference committee so my work will continue into next week.

We also want to continue preparing Kentucky for a stronger, more prosperous future. 

House Bill 495 provides a solution for paying the interest to the federal government on Kentucky’s unemployment insurance loan of $960 million and putting our fund on a sustainable path.

In order to repay the loan, the House proposed a $21 per employee annual surcharge to prevent a $400 per employee Federal penalty.

The Senate added language that provides our businesses an unemployment insurance tax decrease to help recover the costs.

Once the debt is repaid and the trust fund exceeds $200 million, state tax increases in current law will be deferred to enable our businesses to do what they do best – create jobs.

House Bill 300 changes the make-up of the board of the Kentucky state employee retirement system by placing term limits on the board and staggering the terms of the board members, requiring investment placement agents to register as executive branch lobbyists and requiring a state audit every five years.

This will add transparency and accountability to the process.

The Senate will convene for a final day on Thursday, April 12.

Please call me if you would like to share your thoughts or visit us at www.lrc.ky.gov to learn more about the work we have done so far.


Ernie Harris represents the 26th District in the Kentucky Senate, which includes Carroll, Henry, Oldham, Trimble and part of Jefferson County. Contact him at (800) 372-7181 or TTY (800) 896-0305.