A grinding halt
The failure of legislators to enact a budget could result in a state government standstill
At the end of 60 days of policy debates, legislative horse-trading and partisan rancor, the 2010 General Assembly adjourned on April 15 without completing its foremost constitutionally mandated responsibility — crafting a state budget.
The root of the impasse — reconciling a House Democrat-backed $2 billion capital spending program with a Senate Republican initiative to cut spending on most essential services — led lawmakers down a dead-end street, thereby warranting a special session to break the gridlock (assuming it can be done) at a cost of more than $63,000 to taxpayers for every day lawmakers are on the floor.
In the wake of this latest abject failure, Gov. Steve Beshear capitalized on the opportunity to chastise lawmakers, expressing his “disgust” thusly:
“They passed a legislative budget to fund their own salaries, but they refused to fulfill their greatest duty — passing the people’s budget that funds our classrooms, our teachers, our health care programs, our job creation efforts and our efforts to keep prisoners safely locked away.”
This sounds nice, but the governor’s own budgetary panacea — expanded gambling — proved equally inept at addressing the commonwealth’s dire fiscal straits when he introduced it at the opening of the regular session in January. The resultant lack of fiscal leadership in both the legislative and executive branches of Kentucky state government now threaten to shut down Kentucky state government itself. Translation: If Frankfort cannot come up with a budget by July 1, then everything from state parks, public universities, and health and human services to the Kentucky State Police and more will simply shut down.
“There’s a question about whether schools and universities can stay open,” says Louisville Rep. Jim Wayne, D-35. “State parks and environmental protection will be shut down, and if the state cannot execute certain environmental regulations, like clean water, clean air, and things like that, then the federal government takes over some of that. We wouldn’t want it to happen, of course.”
It’s a frightening possibility made all the more real when coupled with looming May 18 primary elections, as campaigning lawmakers’ hands (and votes) will be tied as they defend their incumbencies from new blood, as well as the fact that a 2005 Kentucky Supreme Court decision effectively prohibits the governor from spending money in the absence of a state budget.
Referring to a recent meeting between Beshear, House Speaker Greg Stumbo, D-Prestonsburg, and Senate President David Williams, R-Burkesville, where tax reform measures were relegated to the sidelines, Wayne offers a lamentation.
“That’s the shortsightedness of this governor,” he says. “He has very little vision. If he thinks people are going to thrive and grow without reforming the revenue system, he’s mistaken. It’s unjust… and inadequate to how the economy is growing. Economists I’ve spoken to at U of L and at UK agree, but this governor just seems to have a deaf ear — or two.”
In an interview with LEO Weekly, Kerri Richardson, a spokeswoman for the Governor’s Office, says the administration is reviewing the possibilities internally, and that the 2005 Supreme Court decision is “very wide” and subject to close examination.
“We have an opinion from the Kentucky Supreme Court regarding state services in the event that there is no enacted budget by July 1,” says Richardson. “We are working on our own analysis of that opinion and the federal and state regulations regarding state spending. We have not yet completed our analysis.”
This isn’t the first time the General Assembly has finished a regular session without a budget. Within the past decade, lawmakers came up short on two occasions, in 2002 and 2004, but the state was buoyed when the acting governors — Paul Patton and Ernie Fletcher, respectively — were able to spend at their discretion.
Beshear, however, won’t have that ability. And even if Frankfort comes up with a fiscal plan in the nick of time, their collective procrastination has, for example, already hurt higher education’s ability to plan its own future.
“We had a meeting last week to determine what kinds of activities will be impacted,” says Michael Curtain, vice president of finance for the University of Louisville. “We have two principle sources of funding: state appropriation, and tuition and fees. By definition, tuition is considered state funding. Even though we might be able to collect revenue from our students, it means we can’t spend it without state authorization.”
The budget impasse also threatens to eviscerate mental health services across the state, which by and large utilizes Medicaid funding to operate. In the absence of a budget, Louisville’s Bridgehaven Mental Health Services, which serves about 500 patients a year, would basically cease to exist.
“The difference for us would be so enormous that it would mean we would change from being an organization with a $1.8 million operating budget to an organization with maybe a $500,000 operating budget,” says Bridgehaven CEO Ramona Johnson. “If we didn’t close, we would have to scale back our services dramatically, reduce the number of people we could serve, and determine whether it would even be feasible to operate under those circumstances.
“The truth is,” continues Johnson, “if they don’t pass a budget, then the entire state government will grind to a halt, and that has massive implications for people all across the state. And even though I’m frustrated, I don’t want to have to spend tax dollars for them to do the job they should have finished in the first place.”
Rep. Wayne says the special session likely will occur after the May primaries, but notes that “it gives us a very small window of time” with which to work. But Wayne, for his part, is already looking to the future.
“2012’s budget is the bigger, more serious question,” he says. Under current proposals making the rounds in Frankfort, “We’re already looking at a 4 percent cut in all services, and no Medicaid money whatsoever. We could possibly do a two-year budget (this time), but the second year, in 2012, would be such a disaster that we’d probably have to come in and fix it anyway. My hope, as always, is that we step up to our responsibility and reform the tax system as soon as possible.”