- Associated Press - Monday, March 31, 2014

FRANKFORT, Ky. (AP) - The Kentucky General Assembly approved a $20.3 billion biennial spending plan Monday that authorizes $20.3 billion in spending for education, Medicaid, pensions, and other state government services while cutting spending in many state agencies by 5 percent through fiscal 2016.

The budget bill passed Monday by final votes of 89-11 in the House and 37-1 in the Senate and was sent to Democratic Gov. Steve Beshear before both chambers adjourned. They return April 14 for a two-day session to review any vetoes of legislation passed in the recent session.

Senate Appropriations and Revenue Committee Chairman Bob Leeper, an Independent from Paducah, said the final budget package approved by lawmakers sets Kentucky on a good stead for the future.

“It makes me feel good about what you all will face in the next biennium,” Leeper said.

Democratic leaders in the House and Republican leaders in the Senate spent most of Monday in closed-door meetings finalizing the plan.

The bill would allow state university budgets a 1.5 percent cut rather than 2.5 percent as proposed by the governor, and restores bond authorizations for university projects.

The budget also would authorize full funding of the actuarial required contribution (ARC) to Kentucky’s public pension system. It also moves to restore child care subsidies for low-income families that had been cut from the state budget last year. It will add $39 million for the subsidies the first year of the biennium, and $58 million in the second year.

“We did what you paid us to do,” House Speaker Greg Stumbo, D-Prestonsburg, said of the state budget process. “It was democracy in its purest form, but it worked.”

Under the proposal, Kentucky drivers would not pay more at the pump this summer as House Democrats dropped their support for an increase in the state gas tax.

And Democratic House Speaker Greg Stumbo said he had told legislative leaders to prepare the state’s two-year road spending plan without the extra $107 million that would have come from a 1.5 cents-per-gallon increase in the state gas tax. And state lawmakers approved a two-year revenue bill Monday without the gas tax increase.

House Democrats narrowly approved the gas tax increase earlier this month, saying it was needed for road projects throughout the state. But the Republican-controlled Senate rejected the increase. That set up four days of contentious debate between House and Senate leaders, culminating with a marathon closed-door meeting that ended at 5:30 Sunday morning.

“There will be less money going back to counties and cities to repair the roads, that’s just the fact of life,” Stumbo said.

Kentucky’s gas tax is 30.8 cents per gallon, the 18th highest in the country. The average price for a gallon of gas Monday in Kentucky was $3.61 per gallon, the 16th highest in the country, according to AAA.


The legislation is House Bill 235.

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