General Assembly avoids new taxes, approves budget

After several extended sessions of closed-door negotiations, the General Assembly has approved a $19 billion, two-year budget for Kentucky.
The compromised budget does not contain new taxes on cigarettes proposed by the Democratically-lead House of Representatives that had sparked controversy across the entire legislature.
Supporters of the tax hike wanted a 70-cent per pack levy with opponents rejecting any kind of increase.
Working long into the night April 2, lawmakers passed the budget legislation, House Bill 406, on a 74-21 vote in the House and a 35-3 vote in the Senate.
Under the compromised version of the budget, some of the funding cuts considered for higher education have been restored.
Senate Budget Committee Chairman Charlie Borders, R-Russell, said considering the tight economic times the state is seeing, he is pleased with the overall compromise.
Following the lead of the House, the budget contains revenue from restructuring the state's debt and employee retirements. The Senate's proposal called for higher returns from the state lottery that would be directed into Kentucky's general fund. The final compromise contains elements of each proposal.
Under the compromised budget, the amount of money the state receives from the Kentucky Lottery will increase to about 28 percent annually, up from the current level of 24 percent.
Rep. Harry Moberly, D-Richmond, said the compromised budget was a bad deal for education and social services and voted against the deal.
Moberly said reaching an agreement within the timeframe was not as important as serving the needs of Kentuckians.
Under the bill, the state hopes to save about $200 million each year through retirements, additional revenue from the lottery, debt restructuring and "efficiency measures" or cost cutting.
The bill also provides an addition $40 million to cover the cost of the state's pension plans.
If the budget is approved, the state will still have about $31 million left in its "rainy day" fund by the end of fiscal year 2010.
Despite the tight budget that calls for few spending increases, several construction projects remain, such at the replacement of Eastern State Hospital in Lexington and group homes in Louisville. Funding for construction needs related to the 2008 Ryder Cup event and the World Equestrian Games in 2010 were also included in the budget.
The legislature also hopes to save about $31 million by transferring some non-violent criminals from prison into community programs.
The compromised budget calls for an increase of 1 percent each year of the budget for teachers and state employees. If state revenue increases before the end of the two-year budget, the raises could be up to 3 percent.
The General Assembly is now in recess but will return to Frankfort April 14-15 to deal with any vetoes handed down by Gov. Steve Beshear.
Although he hasn't publicly said if he will approve the budget, Beshear said in a statement that he has concerns about the adequate funding of social programs.
 "I can say I’m disappointed that the proposed budget does not include any plan for additional, recurring revenue so desperately needed by Kentucky," Beshear said. "As you recall I proposed not one but two plans for recurring revenue -- namely expanded gaming and an increase in the state’s low cigarette tax - in an effort to move the state forward in the areas of education, health care, public safety and economic development."
• The General Assembly has passed a bill designed to toughen reporting laws in connection with bullying.
Rep. Mike Cherry, D-Princeton, has been pushing for the legislation for several years. Although his proposals have been passed through the House, the bills never made much headway in the Senate.
House Bill 91, the so-called Golden Rule Bill, directs school officials to report potential felonies related to bullying to law enforcement and requires the Kentucky Department of Education to create discipline guidelines.
During its consideration of the bill, a Senate committee made several changes to Cherry's bill.
In hopes of passing the measure, a conference committee was held but failed to generate a compromise.
But Cherry ultimately supported the Senate changes so the bill could move forward and urged his House counterparts to do the same.
The Golden Rule bill passed the House 91-4 and the Senate 34-2 and now heads to Beshear's desk for consideration.
• Another proposal that has been considered by the General Assembly several times but failed to pass also won approval by both houses.
Senate Bill 120 which requires children under 7 years old and between 40-50 inches tall to use booster seats when riding in a motor vehicle was approved by the General Assembly April 2.
Rep. Tom Burch, D-Louisville, called SB 120 "a watered down" version of his HB 55 but without some of the stricter requirements.
Although Burch said the state would miss out on federal funding that could have been used to pay for booster seats for poor families, getting the law on the books is more important than nothing.
With Burch's blessing, SB 120 passed the House 87-7 and will now be considered by Beshear.
Under the legislation, first-time violators would be required to show they bought a booster seat or be fined $30.
The penalties will not be enforced until July 1, 2009. Until then, police will issue only warnings for booster seat violations.