- Associated Press - Monday, April 11, 2016

FRANKFORT, Ky. (AP) - State lawmakers abruptly ended budget negotiations late Sunday night, declaring an impasse that could lead to a partial shutdown of state government services if the governor does not call a special session.

The state legislature is scheduled to meet Tuesday for the final time this year, capping a contentious legislative session marred by a power struggle in the House of Representatives_the last legislative chamber in the South still controlled by Democrats.

Democrats solidified their majority by capturing three out of four special elections last month after campaigning against the budget cuts proposed by new Republican Gov. Matt Bevin. That set up a combative budget process with Republicans, who control the state Senate.

Negotiations on a two-year operating budget that would spend more than $65 billion on state and federal services had stalled until Sunday, when legislative leaders met formally for the first time in more than a week. House and Senate leaders met privately for more than nine hours trying to reach a compromise. But both sides walked out at about 11:30 Sunday night, blaming each other for the stalemate.

Republican Sen. Chris McDaniel, chairman of the Senate budget committee, said lawmakers finally agreed on cuts of 4.5 percent for state colleges and universities, a major breakthrough on an issue that had stymied negotiations for days. But he said they could not agree on how much to spend on the state’s public pension debt - estimated at more than $30 billion and the chief campaign issue for Bevin. He said the Senate wanted to spend $320 million more than the House did.

McDaniel said the legislature will not approve a budget by Tuesday.

“Until such time as our House colleagues see fit to invest in what’s truly a collapsing pension system, we won’t have a budget,” McDaniel said.

Brian Wilkerson, spokesman for Democratic House Speaker Greg Stumbo, disputed McDaniel’s comments and noted House leaders had agreed to spend $1.3 billion on the state’s pension system. House Democratic leaders did not speak with reporters. But in a joint statement, they said Senate Republican leaders “walked away” as lawmakers were discussing extending the deadline to reach an agreement. State law does not allow lawmakers to meet past April 15th.

“We also thought we had a framework for a compromise, but we learned that there were problems in some areas we thought had already been agreed to,” House Democratic leaders said in a statement. “We in the House remain committed to resolving the budget during this session. We are ready to get together again at the call of the budget chairs.”

McDaniel said the Senate would not agree to extend the deadline for reaching a budget deal, meaning lawmakers would not pass a budget this session. The current budget expires July 1.

If lawmakers do not pass a budget, Bevin would have call the legislature back for an expensive special session. Otherwise, portions of state government would shut down. Legislative leaders say federally mandated programs, including Medicaid and K-12 education, would continue.

A spokeswoman for Bevin declined to comment.

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