By Al Cross
The Courier-Journal

FRANKFORT - Republican Gov. Ernie Fletcher and leaders of the House Democratic majority reported progress on procedure, not substance, after starting negotiations on taxes and the state budget Saturday.

Fletcher and Speaker Jody Richards said after the nearly three-hour meeting that they exchanged many ideas for compromises but made no agreements - other than to not discuss past disputes, keep talking privately and discuss no specifics publicly.

They intend to meet again in a few days but did not set a date.

Both sides said the meeting, which also included House Republican leaders, helped them understand the other side's proposals and stands, and the reasons for them.

"Any time you can understand each other's positions, I think there's progress made," Richards, of Bowling Green, said as he emerged from the governor's mansion yesterday morning. "No positions really altered, that I know of."

Fletcher said, "I think it's a clearer path that we can see - that there's a way of allowing people to get their opinions considered, to begin to, say, walk in the other person's shoes, if you will."

The legislative session ended without a budget in April when the Senate passed Fletcher's tax plan but the House passed only changes in business taxes.

Since the fiscal year began July 1, the state has operated under a spending plan ordered by Fletcher, but his authority to do that is being challenged in court.

House Republican Leader Jeff Hoover said Saturday that he detected progress because there was agreement on the issues that need more discussion in the groups that the leaders represent - House Democrats, House Republicans and the administration. No senators attended.

"I thought it was a very productive meeting," said Hoover, of Jamestown. "I just felt like everyone there was open and we had a good exchange of ideas about where we wanted to go and how everyone thought maybe we could get there, and the roadblocks to getting there. It was just an open, candid discussion."

The meeting was the longest Fletcher has had with a group of Democratic legislative leaders since February, when their talks about tax reform broke down.

Saturday's meeting came after House leaders proposed an alternative budget and tax bill that does not include some of Fletcher's tax measures, such as a big increase in the cigarette tax and changes in taxes on telecommunications.

"It was a good discussion ... that I think helps us at least begin to move toward addressing the issues and concerns that both parties have," Fletcher said. "We're both going to go back and look at some things and discuss some things, try to come back together in a few days and see if we made any progress."

Richards called the meeting "very amicable," and Fletcher said it had produced a very positive atmosphere.

"Basically, we just wanted to cool the tenor down, if you will, and I think we've done that quite a bit," Fletcher said. "Whether or not this will result in an agreement on the budget and some tax changes remains to be seen, but at least it's a positive move in that direction."

For months, Fletcher said he would not call a special legislative session to act on the budget and taxes unless the House and Senate agreed on budget legislation in advance, because special sessions cost $50,000 a day.

Senate President David Williams, R-Burkesville, said Thursday that Fletcher should call a session without an agreement because there are enough votes in the House to pass the governor's tax package with a budget. Richards has disputed that.

Fletcher said Friday that he still wants an agreement in advance, but he opened the option of calling a session without an agreement if negotiations fail. Saturday, he declined to say under what circumstances he would do that.

"If I felt like we were at a point where there could be some positive things done in a special session, even if there wasn't complete agreement, then that would make me lean toward calling a special session," he said.