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In his state of the Commonwealth address, Governor Steve Beshear laid it out fairly straight — we have to tighten our belts. Again. Like every responsible family in the Commonwealth we need to establish a reasonable budget, and exercise the discipline to stick to it. We’ve been doing a pretty good job of that for the last four years, although we haven’t been shy about our bonding (which is borrowing money on a 20-year payback.)
Beshear sees a fairly bleak financial picture for the next two-year budget. The primary reason is that stimulus money from the federal government has run out and we don’t expect any more in the near future. As a result he wants to reduce spending again in all areas, but will try to stay away from elementary and secondary education, and Medicaid. However, he proposes to expand pre-school services to cover all children, which is an expensive proposition. The big question is, where will the money come from?
Over the weekend, I was talking to some folks in Bloomfield about expanded gambling and how it relates to our budget. The answer is: not at all, at least not this budget. Let’s say that the General Assembly agrees to place a constitutional amendment on the ballot this year. We the people vote on it in November. If we approve the amendment, it takes effect in, say, January 2013. At that time, we’re halfway through the first six months of the two-year budget. (Kentucky’s fiscal year begins July 1; therefore this new budget runs from July 2012 through June 2014.)
Time passes as things are implemented, and eventually ground is dug for new gambling venues. By the time the first dollar is lost at a casino, this two-year budget cycle will probably be over. So even if you believe that tax money from casinos will bring in hundreds of millions of dollars, it won’t be helping us with resources for this budget.
Now, it’s a pretty big assumption that any of this expanded gambling will happen. I don’t believe that the House has enough votes to pass a constitutional amendment. It’s also doubtful that the Senate has enough votes. Remember that it takes 60 percent of the legislature to agree to place anything on the ballot for the people to vote on, so a simple majority won’t be enough in the General Assembly.
Of course, when the people vote on a constitutional amendment, all it takes is a majority of those voting. Every survey I’ve taken in the 50th Legislative District tells me that the people want to vote on expanded gambling. Right at 70 percent. They’re not necessarily for the amendment, but they sure do want to vote, and be done with it either way.
It will take a while for the House to send a budget over to the Senate. Between now and maybe the middle of March the budget subcommittees and the Appropriations and Revenue Committee develop a final product for the full House to vote on. If the budget bill passes we send it over to the Senate for their work; of course, they’re already working on a budget in the Senate. If they didn’t, the House would have a great advantage and could hand them a budget with no time left to do serious work. Remember, we have to conclude our session by the middle of April with a limited number of workdays (60) to get it done.
It’s always difficult for legislatures to pass an austere budget. Our system of government is the best in the world, but it offers rewards to leaders who spend more money on more things. A cut in programs or services, even during hard times, is seen by many as a failure of government. Consequently, the tendency is to borrow against tomorrow in order to fund regular increases today. I fear that such methods will be used once again in this legislative session as we finalize a budget that tries to satisfy all those who clamor for more and more and more.
My belief is that we have responsibilities we must shoulder and promises we must keep. Our current difficulty is that many new programs were funded (and promises made) in the “good times” and we are struggling to fund them in these “bad times.” By keeping taxes as low as possible, we force ourselves to be more selective when making decisions about any new programs.
The best part of my job is hearing from you. Call me at home or leave a message at 1-800-372-7181. Saturday’s “Coffee with Dave” is at the Short Line Diner (formerly The Creamery) in New Haven. We start at 10 a.m. and I’ll buy the coffee; hope to see you there.