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Thursday, March 3, 2011

Kentucky Legislature Deadlocked Over Fixing Medicaid Budget

Kentucky's House Speaker Greg Stumbo said Thursday that the House would refuse to cut education funding as proposed by the Senate in its plan to balance the state's Medicaid budget.  “We're not going to cut education when there's a viable alternative, I'll tell you that,” said Stumbo, D-Prestonsburg. “And there is a viable alternative.

In addition, Chief Justice John Minton said the Senate cuts to the judicial budget would prevent the implementation of the penal reform measures contained in a major bill passed this session and signed into law by Gov. Steve Beshear.

The House voted Thursday to refuse to go along with the Senate Medicaid plan. And the Senate was expected to make the deadlock official by refusing to back off from the cuts it proposed.  So a conference committee of House and Senate leaders is expected to begin meeting Friday to resolve the gaping differences in their approaches to balancing the Medicaid budget.

At issue is House Bill 305 which, as passed by the Democrat-controlled House last month, would enact Gov. Steve Beshear's plan to plug a funding hole in the current Medicaid budget with $166.5 million budgeted for the program in the 2011-12 fiscal year, which begins July 1.  Beshear promised in turn to find savings of $166.5 million in next year's Medicaid budget by contracting out certain aspects and services of the program.

But Republicans who control the Senate say that they can't accept Beshear's promise of future savings and that the state must cut spending now to be certain budget problems don't grow worse.  “You need to take precautionary steps now because we don't believe it is possible to have the savings” that Beshear's plan promises, said Senate Republican Leader Robert Stivers of Manchester.

The Senate plan calls for cutting state funding to all agencies by about one-half of 1 percent in the final quarter of this fiscal year, and by about 2 ¼ percent in 2011-12.  Schools and universities would be exempt in the final quarter of this year, and the cut to basic school funding in 2011-12 would be about 1.3 percent.

But Stumbo ruled out cuts to school funding. His office released data showing district-by-district cuts — with the Jefferson County schools losing nearly $4.2 million in 2011-12.  Asked if could accept cuts to any agencies, Stumbo noted that Beshear has already overseen eight rounds of spending cuts in three years totaling $1 billion.  And he said the House would be willing to consider a list of contingent cuts as a “back-up plan” if it appears Beshear's savings may fall short.
“The obvious question is why would we go to the nuclear option, if you will, of cutting education, before we give the governor the opportunity of doing what we know he's been good at doing over the past three years?” Stumbo said.

Education groups, advocates for the needy and others dependent on state funding say more cuts will affect services and force layoffs.  Brad Hughes, spokesman for the Kentucky School Boards Association, said the $38.6 million cut in base funding would deal a serious blow to schools as they prepare to implement the new assessment program known as Senate Bill 1.

The Senate approach gives schools ways to be flexible and stretch their dollars, including permission to exceed maximum class sizes allowed by law.  “But the major concern you would hear from superintendents and school board members is raising class sizes,” Hughes said. “Nobody wants to say to a teacher who's got to start a new teaching approach (under Senate Bill 1) that the class size will be larger.”

Mark Hebert, spokesman for the University of Louisville, said U of L “has suffered 11 budget cuts in 11 years and the state Senate's proposal would add another $4 million in cuts on top of the cuts we're already expecting in 2011-12.  Obviously, we'll be disappointed if state lawmakers approve more cuts.”

Minton said in his letter to legislative leaders that the proposed cuts, on top of reductions in recent years, would total 28.5 percent for the judicial branch.  “The court system cannot absorb further cuts without severely curtailing our daily operations and preventing our ability to implement penal code reform as mandated by House Bill 463,” Minton wrote.
Jefferson County Commonwealth’s Attorney Dave Stengel said, “We've already cut and cut and cut and there's nothing left. This will mean some layoffs and will definitely affect the quality of prosecution and public safety.”

Sheila Schuster, executive director of the Advocacy Action Network, an umbrella organization for groups that advocate for behavioral health and health care reform, said, “Across-the-board cuts will really hurt our already chronically underfunded programs that serve people with a wide range of disabilities who need those services.”

Ellen Kershaw, a spokeswoman for the Alzheimer's Association in Kentucky, said her organization is concerned about the prospect of deeper cuts to state agencies — particularly the state Department of Aging and Independent Living. The agency, which funds services such as senior centers, Meals on Wheels, adult day programs and services at home for the elderly and disabled, has lengthy waiting lists.  “At a time when the aging population is growing and the need is growing, it makes to no sense to impose more cuts,” Kershaw said.
 
But Stivers said that if cuts aren't made now much more painful ones will be required late in the two-year budget cycle when it will be apparent Beshear's approach did not work.  “We'll be in tremendously much worse shape. ... We're talking about 4 and 5 (percent) even maybe higher cuts,” he said.
 
Courtesy, Courier-Journal

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