12/14/17 — The Budget Process in Kentucky
Published in
3 min readJan 4, 2018
The Budget Process in Kentucky
- We’ve talked about a ton of stuff that the legislature has done since we started the podcast, but in reality, the Kentucky legislature has ONE real job: setting the biennial budget.
- Kentucky’s legislature actually didn’t used to meet every year, it used to be the case in the past that they met every other year, and passed a budget. Now, we have “short” sessions on odd years and “long” sessions on even years, when budgets have to be passed. The upcoming session is a budget session, so let’s take some time to talk about how budgets get made in Kentucky.
- Kentucky has to pass a balanced budget. This means that revenues have to be the same as expenses. But, the budget is a two year document! Income taxes come in quarterly (or annually, for personal income taxes) and all the time for sales taxes, so how do we know if the budget is going to be balanced!?
- Enter the Consensus Forecasting Group. We’ve talked about this group in the past — this is the group that released a “pessimistic” view of revenues and caused Governor Bevin to cut the budget earlier this year. Their main job is to tell the Governor how much money the state can expect to collect during the biennium. Once the Governor has that information, he or she can put together an “executive budget proposal”, which is based on the budget requests of all the several areas of state government in the executive branch.
- The executive branch is by far the biggest part of the state government. The LRC and Chief Justice of SCOKY put together similar requests for the other branches of government.
- The budget bills are introduced first to the House of Representatives, and are assigned to the Appropriations & Revenue committee. This committee marks up these bills with amendments. Since the budget is so important, seats on this committee are coveted and often go to the most powerful members of the legislature.
- Once the bills pass out of A&R, they are given three readings on the House floor. This means three opportunities for floor amendments, but that process is pretty tightly controlled by the leadership.
- This situation is mirrored in the Senate — to the A&R committee and then to the floor with three readings.
- In the past, the situation has been that the House passes one budget and the Senate passes another — since we had split control of the House and Senate. Then, it went to a conference committee (like the US Congress and the tax law currently). However, since we now have unified Republican control, this might not happen. But it still might! We really don’t know if the GOP in the House & Senate are on the same page.
- Once the budget passes the legislature, it heads to the Governor. The Governor has line-item veto power over the budget, which means that if he or she doesn’t like something in the budget, the whole bill doesn’t need to be vetoed, just specific lines. If they don’t want money to be spent on Medicaid or whatever, they can veto JUST that portion. But, regular veto override provisions still apply.
- In this session, the Governor has said the budget will be “brutally difficult”. However, I think most of that is just posturing about the pension. We will definitely see. It will probably be reall bad.
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