Special Session Tug Of War Going On

There’s a tug of war going on in Frankfort over Governor Steve Beshear’s call for a special legislative session. As we’ve recently mentioned, State Senate leadership is working to dissuade the Governor from formally calling said special session. Based on what we’re able to discern, there is no agreement on the amount of a 2010 budgetary shortfall. It’s also clear that there is no consensus on what to do about it – regardless of the dollar amount.

Senate President David Williams’ office tells us that Kentucky is only 1.5% off from the revenue counted on in the revised budget passed by the general assembly in March of this year. But his office also says there will be roughly $220 million in additional calls on the Treasury– retirement system payments and such.

1.5% is roughly $130 million. Kentucky is receiving $650 million in federal stimulus funds that could be used for the state’s general fund. Which means, theoretically, we could pay for the $130 million plus the $220 million with half of those stimulus dollars.

Conservatives in Frankfort we’ve recently spoken with seem to be asking similar questions.

The first: Why are we saying there’s a $1 billion (10%) budget shortfall?

The Consensus Forecasting Group used numbers from the biennial budget passed in 2008, not the amended budget of 2009. Since they didn’t use the latest numbers, their estimation doesn’t consider new tax increases, government cuts, the fact that we filled the $456 million shortfall of the current fiscal year, higher Medicaid matches or revised state expenditures.

Second: Are the federal stimulus dollars all earmarked or not?

Eh… yes and no. Roughly 80% of the funds are directed at education. The way most states are allocating those dollars involves “backfilling” with stimulus dollars and shifting state dollars elsewhere. That’s what Williams proposes.

The State House (specifically Democrat Derrick Graham) says there’s not enough interest in casino gambling to call a special session. Greg Stumbo tells the Governor that if he wants casino gambling, he’s gotta work for it himself.

So what’s this all about? Are there enough gambling votes or not? Will David Williams abruptly adjourn? Is anyone considering anything other than gambling to fill our budgetary holes? Are we missing $1 billion or not?

Way too many questions to tackle all at once. But we welcome your feedback.