Published: March 12, 2008 12:33 am            

Where House would spend new money

The House budget committee wants to increase the cigarette tax by 25 cents, refinance debt and spend the money on education and human services.

Frankfort — County jails will be spared. So will Meals on Wheels and there’ll be money to hold down tuition increases in the budget passed Tuesday by the House Appropriations and Revenue Committee.

Universities will receive “continuation” funding rather than the 12 percent cut in Gov. Steve Beshear’s original budget proposal. The budget also adds back in $65 million for non-Medicaid health programs and bonds $500 million to speed up road projects which currently aren’t slated to begin before the final six months of fiscal year July 1, 2009 to June 30, 2010.

It does so by increasing the cigarette tax by 25 cents, refinancing the state’s existing debt, and extending the sales tax to such services as charter flights, limousine service and janitorial services.

The bill must still be passed by the full House and then go to the Senate where it’s certain to be changed. In the end, the differences are likely to be hammered out in a conference committee of leaders of both chambers.

The budget finances the road bonds by freezing 1.4 cents of an automatic 1.5-cent increase in the gas tax scheduled to go into effect July 1. That tax is tied to the wholesale price of gasoline and can float up or down, but with rising oil and gas prices, there is little chance it will go down.

However, according to Don Pasley, D-Winchester, who chairs the transportation subcommittee, if the legislature doesn’t codify the 1.4 cents it can’t use those funds as a dedicated revenue stream to finance the bonds.

The House budget also assumes $85 million in savings from expected state employee retirements. Beshear said that money is already accounted for and the House budget effectively counts it twice. But Harry Moberly, D-Richmond, the chairman of the A&R Committee said that’s not the case and that the numbers in his budget are conservatively estimated.

The budget creates just over $400 million in additional revenue in each year of the next biennium.



Here’s how the additional money will be spent:

•$39 million in the first year and $156 million in the second to fund teacher salary increases of 1 percent and 3 percent;

•$46.2 million each year for extended school services, textbooks and school safety programs;

•$12 million in the first year and $30 million in the second in additional SEEK money, the operational funding for public schools; the money is to aid districts with teacher pay increases for teachers whose tenure and rank will create larger increases than 1 percent and 3 percent;

•$126.7 million to restore cuts to the individual higher education institutions – retaining their current funding levels;

•$55 million for the Bucks for Brains program;

•$450,000 each year for vocational rehabilitation;

•$1.5 million each year for adult education;

•$700,000 each year for veterinarian and optometry slots at universities in other states with which Kentucky has reciprocal exchange agreements;

•$15.4 million in year one and $17.7 million in year two for the KEES scholarship fund;

•$350,000 each year for the Attorney General’s Office to avoid staff cuts;

•$3 million each year for Commonwealth Attorney budgets;

•$2.8 million in the first year and $2.3 million in the second for County Attorney budgets;

•$3 million in the first year and $1.8 million in the second for Property Valuation Administrator budgets;

•$800,000 in the second year for emergency repairs at the Kentucky Arts Center in Louisville;

•$10 million for the legislative budget;

•$65 million in each year to restore cuts in mental health/mental retardation, community based services such as social workers and foster parents; $8.8 million for local health departments; $2.9 million for aging services; and approximately $20 million for some Medicaid services.

Those amounts represent restoration of cuts in Beshear’s original budget – not increased funding.

“This restores the base in these very vital services,” explained A&R Chairman Harry Moberly, D-Richmond.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com.



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