Kentucky Budget Crisis Goes Largely Unnoticed

On July 1, Tennessee residents couldn’t miss the signs that their state legislators had failed to pass a budget: Highway rest areas were closed, road crews were idled and anyone wanting a drivers’ license had to wait.

In sharp contrast, legislators in neighboring Kentucky also had failed to pass a budget. But outside the Capitol, you could be forgiven for not noticing.

Although a judge held a perfunctory 9-minute preliminary hearing on a lawsuit challenging Gov. Paul Patton’s emergency spending plan, it was business as usual for Kentucky state government and its 37,000 employees. Patton himself had remarked a few days earlier that the crisis in Frankfort was “an inside the (beltway) type of game.”

Now, nearly three months later, the state still has no budget. Nor is it likely to get one any time soon. But the state government is still churning along.

The court case involving Patton’s emergency $18 billion spending plan – a proposal that roughly reflected one of his original budget plans – isn’t likely to be settled before November at the earliest. That timetable, given its convergence with the election season, makes it unlikely there will be any special legislative session. Instead, lawmakers will probably tackle the issue – and the painful revenue shortfalls that continue to hammer the state – when they convene for their short, odd-year session in January 2003.

The state program most affected by the lack of a budget has been the so-called “Bucks for Brains,” a $120 million effort to help Kentucky’s research universities hire top faculty. It had been financed by bonds, which require legislative approval to issue, so it wasn’t included in Patton’s emergency spending plan.

“It’s in limbo,” says Mary Lassiter, special assistant to the state’s budget director. But, she noted, the initiative had been included in every version of the budget considered by the legislature, raising the likelihood that it will be endorsed for the budget’s second year. “There has been demonstrated support for it,” she said.

Initially, both Republicans and Democrats tried to attack one another over the issue that precipitated the unprecedented budget standoff the issue of whether the state should provide partial public financing for gubernatorial candidates who agree in turn to limit their spending.

Even as legislators reluctantly convened for a special session to try to resolve the impasse – an undertaking that proved unsuccessful — Republicans aired radio ads that decried the program as “welfare for politicians.” Democrats argued that the program was needed to keep special interest money from “buying” the governor’s mansion.

Patton’s emergency plan keeps the program for now. Mirroring provisions usually included in budgets passed by the legislature, the plan also suspends enforcement of about 140 state laws, including ones that mandate certain pay raises for state workers and cap state government employment at 33,000, about 4,000 fewer than the actual number of workers.

Republicans last month tried to challenge the issue of the suspended laws in court, with Senate President David L. Williams and Majority Leader Dan Kelly arguing that Patton should not have suspended one law in particular, a measure that deals with the amount of coal-tax revenue that the state must return to counties. But a judge accused the Republicans of trying to make a political statement by selectively challenging the suspended laws.

Since then, the rhetoric has cooled as the case makes its way through the legal system. In the end, the budget battle may not end up being as much of a political issue in the fall election cycle as many first thought, says Vince Gabbert, who is coordinating state Senate campaigns for the Democratic party.

Why? Voters are more interested in talking about issues like the cost of health care or prescription drugs, he says. “I don’t think most people are paying a whole lot of attention” to the budget impasse, he says. “The essential services are still running. There’s no reason for them to notice.”

Angie Muhs writes about government affairs in Kentucky.