By Charles Wolfe
The Associated Press

FRANKFORT - The General Assembly passed a state budget Monday night that appropriates $14 billion through fiscal year 2004.

It makes fewer cuts than expected in human services but also provides a way through bonding to finance hundreds of projects, from water lines to new school buildings to golf courses.

It preserves lottery-funded college scholarships and provides money for comparatively modest pay raises to state employees, teachers and classified school employees.

Patronage jobs were put on the chopping block, however.

Gov. Paul Patton would have to start dropping dozens of his appointees from the payroll. The budget orders 250 nonmerit employees to be eliminated by December.

The Senate vote was 36-1. The only dissenter was Democratic Sen. Ernesto Scorsone of Lexington. Another Democrat, Sen. David Karem of Louisville, was absent. The House vote was 87-7, with five Democrats joining two Republicans in dissent.

A feature of the proposal is the use of money from the coal severance tax and from Kentucky's share of a tobacco industry legal settlement to finance bond issues for selected projects.

"We didn't have the money in this biennium to do the usual projects," said Rep. Harry Moberly, chairman of the House appropriations committee.

But he said legislators were keenly aware of "infrastructure needs," especially water and sewer lines, plus replacement of some of the state's oldest school buildings.

Altogether, the budget would fund bonding for 267 water and sewer projects.

Moberly's counterpart in the Senate, Republican Sen. Richie Sanders of Franklin, said 28,600 households would get public drinking water for the first time and 9,800 would get sewers. He said 712,000 households already with drinking water would get improved systems.

Coal-severance money also would help finance $340 million in bonds to replace about 25 of the state's most decrepit school buildings, some in districts without bonding capacity to do the job themselves - not to mention without coal.

"We all benefit from elimination of these schools," House Majority Leader Greg Stumbo said.

The proposed budget also would allow the state to finish golf courses that have never opened because they lack pro shops and other equipment.

Rather than earmark specific money, however, the budget would authorize Tourism Development Secretary Ann Latta to float a bond issue, using her agency's maintenance money for debt service. That's provided she could show that opening the courses made better business sense.

"It would take $1 million a year just to keep the grass cut," said Stumbo, a powerful supporter of the golf courses.

Latta's cabinet would get that money for maintenance, anyway, Stumbo said. "There's not one dollar added to the state's obligation" to the courses.

Other bond projects included $15 million for completion of the renovation of Lexington Center, part of which is Rupp Arena, home of the University of Kentucky's men's basketball team. There also was $5 million for a regional industrial park in Graves County.

Most state agencies had their funding cut 2.6 percent through fiscal year 2004.

An exception was the Cabinet for Families and Children, which had no further cuts. Moberly said conferees "made human services a high priority."

Conferees also increased funding for Medicaid by $47 million in 2004 - not enough to offset a projected $216 million overrun.

The budget also had some casualties.

Lt. Gov. Steve Henry would lose a chef and other staff for his official residence, along with his Kentucky State Police security detail. The mansion employees would be given 30 days' notice.

Kentucky Wood Products Competitiveness Corp., an obscure agency created to promote the wood-products industry, would be eliminated. The agency made headlines when it paid $145,000 to the consulting firm of Democratic fund-raiser Frank Shoop. State auditors reported they were unable to verify that the agency got any services for its money - an assertion disputed by Shoop's firm.

Also axed was the state's lobbying office in Washington, D.C., for which funding would cease after Sept. 1.

Another branch of the governor's office, the Coal Marketing and Export Council, would get about $300,000 a year, less than half its current funding.