Tuesday, April 13, 2004

Lawmakers still considering state budget

By Joe Biesk
The Associated Press

FRANKFORT - With time running out on the 2004 General Assembly, House and Senate lawmakers on Monday attempted to break the political stalemate that has left a final state budget agreement in uncertain territory.

Still, the odds were "95-1" against the two chambers reaching an agreement this session, said House Speaker Jody Richards, D-Bowling Green. The Senate had adjourned until Tuesday morning, hours before the House passed its latest budget proposal along partisan lines, 62-0, with all 36 Republicans and two Democrats not voting.

"It could still work, but all the pieces would have to fall together just right," Richards told reporters following the vote.

Monday was a day filled with political maneuvering, as the House and Senate each passed revised budget proposals drafted by the majority party in each chamber.

The House also passed its own scaled-down tax proposal on a 60-34 vote.

Budget negotiations between a joint conference committee of the two chambers stalled last week without an agreement. Budgeteers could not agree whether to address Gov. Ernie Fletcher's proposed tax plan along with the budget or separately.

Senate Republicans wanted any budget talks to include the governor's proposed tax plan, while House Democrats maintained the spending plan should be separate.

That prompted both sides to halt negotiations and work on their own measures in private.

Fletcher's "revenue neutral" plan includes a series of tax increases and cuts. It would, among other things, raise the state tax on alcohol, tobacco and satellite TV service. Some low-income households would be relieved of state income tax. More corporations would be eligible for taxation, but at a lower rate.

Lawmakers are working under a constitutional deadline of April 15, but the last scheduled day for the session was Tuesday. It was uncertain whether lawmakers would postpone their final day until later in the week.

The Senate plan includes Fletcher's tax plan - a major area of contention between the two sides - along with some concessions aimed at satiating House Democrats, said Senate President David Williams, R-Burkesville.

"What we tried to do on every situation is create a budget document that would be more acceptable to House Democrats and make it more House friendly," Williams said.

Among its changes, the Senate Republican plan would eliminate lawmakers' cost-of-living pay increases, allow the executive branch to decide the fate of the planned Elliott County prison and restore $500,000 each year of the biennium to the state auditor's and the state treasurer's offices. It would also provide money for the reconstruction of Mullins Elementary School in Pike County, Williams said.

The Senate approved the plan Monday along partisan lines, 22-0-16, with all 16 Senate Democrats casting a "pass" vote.

Senate Democrats blasted the proposal, saying a plan to overhaul the state's tax code required more consideration.

Sen. Gerald Neal, D-Louisville, criticized the plan, because the proposal was not agreed on by representatives from both chambers.

"This process is clearly a sham," Neal said. "It's the type of thing that causes people to have contempt for the legislative process."

Richards said the Senate's move was against House rules because a majority of the conference committee did not reach any agreement.

Meanwhile, the House-approved plan would also remove lawmakers' annual cost-of-living pay increases. It would reduce the salaries of Fletcher's executive cabinet secretaries and provide more money for teacher pay increases, Democrats said.

The move was aimed at sparking renewed budget talks between the two chambers, said House Appropriations Chairman Harry Moberly, D-Richmond. The House version "contains some of the best things" between the House and Senate versions, Moberly said.

The House also passed a reduced tax proposal that, among other things, would not raise taxes on telecommunications services such as satellite TV. However, the House tax proposal also includes a reduced version of the governor's corporate tax proposal, Moberly said.

Rep. Scott Brinkman, R-Louisville, said the plan would add a tax burden that could hurt "mom and pop" businesses across the state.

Lawmakers were on the verge Monday of repeating the 2002 session when they adjourned without an agreed budget.

However, Senate Majority Leader Dan Kelly said there was still time to get an agreement. Senate Republicans decided to adjourn until Tuesday morning but were not dismissing an agreement, Kelly said.

"If there is going to be any serious dialogue, we can get it done by tomorrow," Kelly said. "If there isn't any serious dialogue, it would just be more wasted days."

Fletcher can call lawmakers back for a special session to deal with either the budget or his tax plan. But Richards has said he would likely adjourn the House if Fletcher calls lawmakers back to Frankfort.

The governor said Monday he was uncertain whether he would do that.

"I'm not going to waste taxpayers' dollars to call them in here and have him adjourn," Fletcher said.

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