Assembly’s budget could mean state employee cuts

By Ronnie Ellis

Kentucky’s top two lawmakers said Jan. 22 the legislature will craft the state budget and it might force executive branch agencies to reduce the number of their employees. They said gambling is dead for now and they don’t expect tax reform to pass in this session, although both acknowledged the need to address the tax code soon.

Speaker of the House Greg Stumbo, D-Prestonsburg, and Senate President David Williams, R-Burkesville, said the two chambers will start work together on a two-year state budget which they will craft “from scratch,” effectively writing off the proposal Gov. Steve Beshear made last Tuesday to fund a shortfall of more than $1 billion with gambling revenues.

“It’s dead,” said Stumbo of Beshear’s gambling revenue proposal.

“I concur,” said Williams and the two immediately began talking about the need for the two chambers to work cooperatively and early to build what Williams said will likely be an “austere” budget. Williams said Beshear’s budget proposal has “limited relevancy.”

Both men said they will sit down and ask appropriate committee chairs to do the same to begin putting a budget together. Both cited the example of private businesses, which are preparing for economic growth by “re-tooling,” with Williams pointing to the downsizing that many companies have undertaken. The message seemed clear – Williams wants the budget to drive reductions in government expenses, including personnel.

Williams said the number of upper level, non-merit employee needs to be reduced and management positions – some of which supervise only four or five people – need to be consolidated. Stumbo jumped in with how the legislature might ensure that happens.

“We have a unique ability at this point and time to require the agencies to do things that perhaps even the governor can’t get them to do because it is hard to get agencies to do things to move in different directions.” Stumbo said.

“It’s hard to apply efficiencies unless you cut down the amount of money and tell (agencies) what they can’t do and allow them to manage their way out of it,” Williams said. “And if they won’t, well, then they’ll just run out of money.”

Stumbo agreed. He said lawmakers could appropriate a limited amount of money and tell them if they can’t manage it and run out of money, “Then it’s up to you whether you lay people off or not.”

Stumbo said he has asked Rep. Bill Farmer, R-Lexington, and Rep. Jim Wayne, D-Louisville, to work with Rep. Harry Moberly to “blend” their two tax reform proposals and he expects a report from them next week. But that doesn’t mean tax reform will happen soon enough to help with the current budget shortfall.

“I don’t think we’ll get to where we can actually do tax – quote, unquote – modernization in this session because we have the daunting task of writing an entire budget which we’ve never really had to do before,” Stumbo said. “But I think it’s good we start the debate.”

Williams said tax reform “discussions have to hasten,” but he cautioned that doesn’t mean tax increases or a “tax system to redistribute wealth.” Both seem interested in extending the sales tax to services and Stumbo wants to re-visit existing tax exemptions. He said those might account for as much revenue as the size of the entire state budget.

Wayne said later it is time “to put some ideas out there and start the debate, because it’s a very complicated issue.” He said he hasn’t given up on the possibility of reform in this session because lawmakers haven’t yet confronted the “blood-letting” in the second year of a budget which has no new revenue.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

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