Daily Independent (Ashland, KY)

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March 24, 2014

Senate sets budget with ‘wiggle room’

FRANKFORT — It was no surprise the Republican-controlled Kentucky state Senate altered the $20 billion, two-year state budget approved by the Democratic-controlled House, but there may have been a few who were surprised by how little it was changed.

“It’s hard to react to something we haven’t seen in total,” said House Speaker Greg Stumbo, D-Prestonsburg, when asked his reaction to a Senate plan that removed the majority of bond-funded capital projects proposed by Gov. Steve Beshear and approved by the House.

“But I think there’s enough wiggle room on both sides (to work out a compromise),” Stumbo said, adding he thinks the legislature can agree on a budget before the 2014 General Assembly adjourns.

The Senate scaled back bond projects from the $1.07 billion in the House budget to $265 million. It also scaled back agency bonds – those which are paid for by universities using their own revenue sources – from $974 million to $270 million.

But in exchange, the Senate version restores a 2.5 percent cut in universities’ operating funds.

“We thought that was important to let the universities get their operating money up and hopefully reduce the potential for significant tuition increases,” said Senate budget chairman Bob Leeper, I-Paducah.

Leeper said the Senate wanted to lower the state’s debt ratio (6.2 percent versus the House plan’s 7.05 percent) and the structural imbalance in the budget (using one-time funds to pay for recurring expenses). The Senate plan makes fewer fund transfers from restricted funds to the General Fund.

Community colleges get to keep their construction projects which are to be paid for with 75 percent of the cost from their own revenue and 25 percent in local community fundraising. The colleges have said they’ll pay their part by adding a $4 student activity fee per credit hour in the first year and doubling it to $8 in the second.

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