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Budget Negotiations Resume, But Big Differences Remain

Lawmakers are back at the table after budget negotiations stalled last night amid deep differences over how to start fixing the state pension systems and how much money to cut from K-12 and higher education.

Tuesday morning, Gov. Bevin, along with Republican leaders of the House and Senate, held a formal press conference calling out Democratic House Speaker Greg Stumbo for delaying the budget process.

“There will be tremendous pain inflicted upon the people of Kentucky if the Speaker does not sit down and come up with a budget. It is up to him,” Bevin said.

Bevin accused Stumbo of “not taking this process seriously."

House leaders later proposed the beginnings of a compromise plan. It includes some of Bevin’s proposals for the pension system, along with reduced cuts to education.

Bevin wants to create a “permanent fund” for fixing the pension system in the future. House leaders included that fund in its plan, but suggested setting aside $250 million for the fund instead of Bevin’s proposed $500 million.

The plan would go along with Bevin’s suggested contributions to the pension systems--$845 million over two years--and include the Senate’s proposed $371 million balance for the state rainy day fund.

But the proposal diverges from the Senate plan when it comes to education funding. The House's suggested compromise includes $304 million more than the Senate's budget for K-12 and higher education and K-12 and $25 million for a free community college scholarship program.

Senate Appropriations Committee chairman Sen. Chris McDaniel said he disapproves of the House compromise because it takes money from the Employee Health Insurance Trust Fund and puts it toward general expenses. He wants the money to go to pensions.

“It’s supposed to be for employee benefits and I want to see it remain there,” McDaniel said.

Tuesday is the 58th of 60 working days for this year's General Assembly. Lawmakers normally save the last two days after Gov. Bevin's "veto period," but will likely have to exhaust all of them negotiating the budget.

By exhausting all legislative days, state legislators would not have the opportunity to override any vetoes Bevin makes to the budget or other bills.