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Meet w/ David

Special Session Successful

State Representative David W Floyd

Jun 2, 2010

Your General Assembly enacted a budget last week in a six-day Extraordinary Session, called by Governor Beshear after the House and Senate failed to reach agreement during the Regular Session that ended April 15th. In most ways I like the budget, in others not so much. For the first time in my memory, Kentucky’s enacted budget actually cuts total spending from the previous budget. It ended up a simple matter, and I believe that it was because the people spoke, and the House finally listened.

The Senate and Governor Beshear proposed budgets that recognized the truth: we just don’t have the money this year. Times are tough; tax revenues are down. In circumstances like that you just can’t enact a budget that pretends nothing has changed. During the Regular Session the House majority wanted to make up for lower revenues by raising taxes, using that to borrow more money, and spending it on construction projects. They believed that it was their job to create jobs. When they went back home they heard the people speak, and returned to Frankfort understanding that it was time to enact a budget that didn’t raise taxes and increase our debt.

In my report to you after the Regular Session I wrote about a Conference Committee budget. It was agreed to in committee by: all Senate Republicans; all Senate Democrats; and all House Republicans. That budget was moved to the Senate floor where it passed the entire Senate with only three “no” votes. Approval was overwhelmingly bipartisan in the Senate. But the House majority refused to vote on it, and we left for home with our work undone.

The budget that we passed on Friday is almost word-for-word the same as the Conference Committee budget from April.

When the governor called the special session he included additional items. First, we were to consider legislation that would repair our unemployment insurance fund (UIF). This fund is comprised of the accounts of every business where people are employed. An employer pays into it every month according to their payroll. When a worker is laid off the UIF is tapped to pay them while they (ostensibly) look for work. If an employer lays people off frequently the rate they are charged goes up; if they never lay anyone off their rate goes down to a minimum.

Kentucky’s UIF was drained dry a couple of years ago and we have borrowed heavily from the Federal Government to continue paying benefits. We owe them about $800 million. If we didn’t enact a fix of some kind, the Feds would impose interest charges for the state and other surcharges on employers. The plan that we enacted will protect employers from outrageous charges, saving about $700 million over a ten-year period. It gradually raises their rates and reduces the unemployment benefit to laid-off workers. Not pretty, but it will work to keep the Feds at bay.

Another issue was the “tastings” bill. It would have permitted distilleries and wineries to offer ½ ounce servings of their product at special gatherings like the World Equestrian Games. This bill passed the Senate but was defeated in the House.

We also passed an operating budget for the Transportation Cabinet. Without this budget many state highway workers would have been laid off and the enormous amount of work on state highways would come to a halt.

Finally, we passed a two-year road plan. This plan details the road construction projects in every county of the state, allocating federal and state road tax dollars for the biennium. I will report on this to you in my column next week.

The General Assembly won’t go back into session until January 4, 2011 unless the governor calls us into another Extraordinary Session – and I don’t anticipate that happening. Meantime, work continues in Frankfort during the interim committee meetings. The best part of my job is hearing from you, so please call me at home or leave a message at 1-800-372-7181.