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Kentucky Budget Negotiations Coming Down To The Wire

Lawmakers are still trying to produce a compromise budget to delineate $22 billion in state spending over the next two years.

Leaders from the Democratic-led House and the Republican-led Senate have spent much of the last week trying to come up with a final version of the budget.

Partisan squabbling and disagreements over how to fix the state’s ailing pension systems and whether to cut higher education spending have complicated negotiations at the closure of the legislative session.

During a break in the closed-door budget conference committee meeting Wednesday morning, Senate President Robert Stivers was upbeat about the discussion.

“It’s been actually, probably one of the most productive one-hours I’ve seen,” he said.

Stivers refused to go into detail about what concepts budget negotiators were working through.

Most of the horse-trading has focused on how to spend about $500 million in surplus from the Employee Health Insurance Trust Fund. The Senate favors putting most of the money into a newly devised pension “permanent fund” to be used for future expenses in the state retirement systems.

They've also proposed nearly across-the-board 9 percent spending cuts, with exceptions to Medicaid and the public school funding formula, among other programs.

The House wants to exempt higher education and other K-12 programs from the cuts by leaving less money in the “permanent fund," which House Speaker Greg Stumbo has said could not be guaranteed for future use for pensions.

The House has also proposed using Gov. Matt Bevin’s model for funding the state pension systems, which puts in less money than the Senate or House originally proposed.

Senate leadership criticized the House’s latest proposal, saying that money from the Employee Health Insurance Trust Fund should be used entirely for the pension system. Their latest proposal reduced cuts to K-12 programs but still left 9 percent cuts to higher education.

With only two official working days left in the legislative session, lawmakers have adjusted the calendar to leave room to approve a budget and still finish close to on time. The budget committee is trying to come to an agreement in time for the next official working day on Friday.

Bevin will then have a week and a half to review the budget and other bills.

If all goes according to plan, the last day of the legislative session would be April 15, giving lawmakers an opportunity to override any vetoes Bevin makes.

When asked if lawmakers would finish in time to get the budget ready for Friday, Stivers wouldn’t say.

“I don’t want to try to get into estimating,” he said.