- Associated Press - Monday, March 24, 2014

FRANKFORT, Ky. (AP) - The Kentucky Senate pared bond funding for construction projects and restored operational funding for universities in passing its version of a $20 billion, two-year state budget Monday, setting the stage for negotiations with House counterparts.

Senators voted 25-2 to pass a budget featuring several similarities to the spending plan recommended by Gov. Steve Beshear and passed by the House. Now both chambers must settle on a final version and complete their biggest task this year.

Senate and House versions support pumping more money into the state’s main funding formula for kindergarten through 12th-grade classrooms.

Both chambers also endorsed 5 percent funding cuts for many state agencies, freeing up money for education as Beshear recommended. The competing budget plans each support pay raises for state employees.

Beshear, reacting to the Senate action, said there are some big differences that negotiators will have to resolve.

“I expect we will come to an agreement before the end of the session,” the Democratic governor said in a statement.

House and Senate negotiators in coming days will try to iron out a state budget proposal for the two-year period starting July 1.

The biggest gulf between the chambers was the amount of bond funding for projects.

The Republican-led Senate authorized $263 million in General Fund-supported bonds, down from about $1 billion in the House version. Projects dropped in the Senate version included $65 million in bonds to help renovate Rupp Arena and build a new convention center in downtown Lexington.

That drew an objection from Democratic Sen. Reginald Thomas of Lexington, who said the home of the University of Kentucky men’s basketball team is a Kentucky landmark and that the construction project would create jobs.

The project was dropped a day after the Wildcats defeated Wichita State, the Midwest Region’s top seed in the NCAA tournament.

“All I’ve heard all day is how excited we are here in Kentucky, and particularly Lexington, about our Wildcats winning and going on to the Sweet Sixteen,” Thomas said.

Senate President Robert Stivers, R-Manchester, said there are “some serious problems” with the overall financing package for the project.

Meanwhile, the Senate version would restore a 2.5 percent cut in operating funds for universities included in the House’s budget.

But the Senate plan eliminated nearly all bonded projects at universities - whether backed by state General Fund dollars or by the schools themselves.

The Senate version tweaked a provision that could lead to a new student fee to help finance construction projects at the state’s two-year schools. The Senate added language requiring each college’s governing board to approve the higher fees and project on its campus.

The Senate’s plan also adds money for Kentucky State Police to hire more troopers.

The Senate version dropped additional funding proposed by Beshear and the House for pre-school services. The Senate also deleted additional funding for increased cancer screenings, deciding that those preventative measures would be covered under the federal health care law.

The budget bill was opposed by two Republican senators, while a number of Democratic senators abstained from voting.

Senate Minority Floor Leader R.J. Palmer, D-Winchester, said the Senate’s version had many good features, but he objected to language that dropped the House’s requirement that school districts give teachers a pay raise. The Senate encourages districts to give those raises.

“Our teachers, for far too long, have been required to do more with less,” Palmer said. “They deserve the raise that was in the governor’s proposal. They deserve the raise that was in the House proposal.”

Senate Republicans said the districts need flexibility because in some instances, the increase in state funding wouldn’t cover the pay raises.

The Senate also stipulated that no state General Fund money could be used on the state’s new health insurance exchange, a key part of the federal health care overhaul.


The legislation is House Bill 235.

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