Monday, January 21, 2002

Choices few in budget debate

By Mark R. Chellgren
The Associated Press

        FRANKFORT — Gov. Paul Patton has been visiting places in state government few of his predecessors have gone before.

        The trips have not been physical, but fiscal, as Mr. Patton has gone off in search of money to balance a budget more precarious than ever before, at least in terms of dollars.

        The budget will not be formally presented until Tuesday, but some of the choices already made are difficult and likely will prove enormously unpopular, especially among the groups whose appropriations might be expropriated. Those already known constitute an eclectic group — teachers and school administrators; state employees, current and retired; people unable to afford health insurance on their own; even the owners of old gas stations.

        Yet the question remains, in the midst of all the moaning certain to accompany the budget debate over the next two months: If not Mr. Patton's plan, then what?

        Mr. Patton already has revealed that he plans to dip into several special funds to find money to fund the government.

        One is the money set aside for the high-risk pool for people who cannot obtain health insurance on the open market. Insurance companies, which could be subject to some levies to make up shortfalls in the fund in the future, will almost certainly complain.

        Another is the underground petroleum storage tank fund, which is financed with a 1.4 cent per gallon tax on gasoline. It is supposed to help pay for the removal of old underground tanks, which might be leaking and contaminating the soil. The fund has a lot of money in it and has been very slow in paying out claims for removal projects. But service station operators, large and small, could complain.

        Mr. Patton has also said he will demand that local school boards provide teachers and administrators with a 2.7 percent raise in the coming year while also using an expected increase in federal funds to pay for benefits for employees who are paid under federal programs. The state has previously picked up the cost of the benefits.

        Local schools, which wield enormous influence with legislators, are already starting to grumble. Mr. Patton said he doesn't want to hear it. “You're going to have to suck it up just like everybody else is,” Mr. Patton said he told school leaders.

        Similarly, state employees have already begun grumbling about Mr. Patton's plan for a 2.7 percent raise for them in the first year of the budget, rather than their traditional 5 percent. In addition, Mr. Patton said he will propose a reduction in the state appropriation to the state retirement fund, roughly equivalent to the amount of money the fund is going to get from a stock windfall.

        “It doesn't affect anybody's retirement. It doesn't affect the solvency of the fund in any way whatsoever,” Mr. Patton said. “They'd get a while lot more upset if we didn't have the 2.7 percent raise.”

        Mr. Patton will set the budget debate on Tuesday with his own recommendations, but it technically falls to the General Assembly to write the state spending plan for the two fiscal years beginning July 1, 2002.

        Historically, the House and Senate both undertook hearings on the budget simultaneously, then drafted versions of their spending plans that wound up in a conference committee.

        Two years ago, the Republicans newly in charge of the Senate chose instead to wait for the House to complete its work, then complained about how late it was. That situation led to a tax increase on long-distance telephone calls, which is unlikely to be repeated.

        So without new money, and few places to look for it that have not already been scraped clean, legislators will be faced with few alternatives.

        Patton administration officials are concerned that the legislature may not pass a budget during the regular session that is scheduled to end April 15. That carries a potentially huge political price. Legislators could be blamed for shutting down government or raising the threat of it.

        As much as everyone dislikes the budget, Mr. Patton's fiscal plan could end up a political fait accompli.


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