County benefits from budget changes

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Jobs, soldier pay, public safety measures get the ‘go ahead’ after special session

By Bob White

By BOB WHITE bwhite@thenewsenterprise.com

FRANKFORT – With the Special Session finished and state budget adjustments passed, elected representatives are saying the Hardin County area did well considering the economic climate.

Potential jobs, soldiers’ pay and public safety were items included in the budget likely to have the greatest impact on Hardin Countians.

One item elected officials interviewed by The News-Enterprise on Thursday all agreed to the importance of was legislation paving the way for a proposed battery manufacturing plant in Glendale.

Sen. Elizabeth Tori, R-Radcliff, said the legislation gives the state authority to transfer, or lease, the 1,500-acre tract in Glendale to large-scale manufacturers, such as those tied to National Alliance for Advanced Transportation Batteries, known as NAATBatt.

NAATBatt is a nonprofit consortium of more than 50 businesses designed to produce advanced technology lithium-ion batteries.

In May, the consortium announced selection of the Glendale site for a proposed battery production campus.

Rep. Jimmie Lee, D-Elizabethtown, said the legislation eliminates potential legal challenges that could arise about uses of the property.

According to Lee, as long as businesses have a connection to the lithium-ion batteries slated for production at the site, they will be allowed to build at the Glendale site.

“It sailed right through,” Lee said of the measure.

The Glendale battery campus project relies on $300 million in Department of Energy funds for which more than 100 businesses are competing.

Lee said two-thirds of the requested total would suffice to make the project a reality, because other sources of funding for the project could be found.

Describing the consortium’s nonprofit status as a plus for NAATBatt’s application, Lee said he’s confident NAATBatt and Kentucky will be among top competitors for DOE awards.

Awards are expected to be announced in late July.

As do opinions of overall success of the eight-day Special Session, so vary the value of items included in it.

State income taxes for military cease. “The most important thing” done at the special session was to exempt military pay from state tax, Tori said.

“For three years in a row it was killed in the house, but this year I put it in the budget and it passed,” she said.

Kentucky has been losing Fort Campbell-area residents to Tennessee, because the southern state doesn’t impose an income tax, she said.

Eliminating income taxes for military personnel will help level the playing field for Kentucky communities near Fort Campbell opposite Clarksville, Tenn., officials say.

“And a lot goes into that,” Tori said.

With the negative impact on local economies, Tori said loss of residents also negatively impact Census figures, which can affect federal grant monies the state receives.

Rep. Dwight Butler, R-Harned, agreed with Tori on the value of eliminating state income taxes for military personnel.

“I see this as an investment,” he said. “This is a welcome mat.”

Butler, as did Lee, noted that the move wasn’t approved without discussion and concern.

“It’s a great cause, and no one will say it isn’t,” Lee said. “But no matter how worthwhile projects are — without a funding source, it digs a deeper hole.”

Kentucky’s continuing economic problems. The hole Kentucky faces by eliminating the income tax for servicemembers is projected to be about $18 million deep – certainly no help in bringing Kentucky out of the abysmal $1 billion deficit legislators faced heading into last week’s session.

With no ways offered to compensate for revenue loss tied to the military income tax elimination, Lee described it as one of many “worthwhile projects” that increase state debt.

“We went in (to the session) with a billion-dollar deficit,” Lee said. “And we didn’t help ourselves out much. In fact, we created about $60 million more debt than we had going in.”

For Lee, the overall budget session was “lukewarm.”

To compensate for most of the shortfall, Kentucky legislators shored up the budget with $750 million in federal stimulus money.

The remainder will be reconciled with cuts made by Gov. Steve Beshear. Part of the budget gives Beshear authority to make those needed cuts.

Beshear, in a Wednesday press conference, warned those cuts could be deep and painful.

In a news release, Beshear said he was disappointed that his and Speaker Greg Stumbo’s “long-term fix” of allowing video slots at horse-racing tracks wasn’t adopted, while millions in spending were added to the budget.

He said the failure to pass slots for tracks will force him to make deeper cuts throughout government.

This year was bad, but next year could be worse.

“If the economy doesn’t pick up, the next session will be even tougher,” Butler said. “It’s not something I look forward to.”

Lee agreed. Federal stimulus may not be available to plug the budgetary gap next year as it did this one, he said.

Regarding slots, Tori, Butler and Lee said their constituencies seem to prefer taking the expanded gambling issue to the ballot for a public vote, rather than leaving it to legislators to decide.

Help for PVAs, new property owners, prosecutors and public defenders. Offices of Property Value Administrators are immune from further budget cuts.

Tori said staffing and financial troubles within PVA offices statewide have caused problems in recent years. Their exemption from cuts will make for a better work environment than they’ve dealt with in past years, she said.

Also evading the chopping block is financial support for Department for Public Advocacy attorneys and state prosecutors.

Prosecutors statewide were dealt three weeks of mandatory furloughs this year — something Commonwealth’s Attorney Chris Shaw said created hardships in maintaining a staff and prosecuting cases in 9th Circuit Court.

The measures approved will sustain funding set forth in previous budgets, according to Elizabethtown DPA Shelia Kyle-Reno. Some debt also will be eliminated.

“We were going to have to carry over $1.47 million in debt,” Kyle-Reno said. “(Legislators) added $1.7 million.”

Although funding will be sustained for DPAs and prosecutors statewide, Kyle-Reno said this year’s budget does nothing to address attorney caseloads that are “unethical.” She said attorneys at the local office continue to work about 440 cases each annually – far more than the ethical standard established by the Kentucky Bar Association.

Funding for county jails also is being sustained.

Another positive item Tori highlighted from the budget is a newly available $5,000 tax credit for buyers of newly constructed homes.

With the housing market in a slump, Tori said the credits will be “an economic boost” for the industry.

She said the credit can be used over several years, if that benefits the taxpayer.

Notable moves for other parts of the state. Lee said legislators succeeded in passing a “huge piece of legislation” giving Louisville-Metro Council the ability to create an authority focused on construction of two bridges connecting downtown Louisville to southern Indiana.

With Kentucky’s share of the bridge construction projected to be about $3.3 billion, Lee said ways to pay for it must be developed. That, he said, is what the authority’s aim will be.

“If you paid for it with regular transportation funds, you couldn’t build another road in Kentucky for 15 years,” Lee said.

The authority, to include appointees from Kentucky and Indiana, could decide to toll bridge users to pay for construction, Lee said. “But it’s still too early to presume those bridges will be tolled,” he said.

State employee paid holidays will not be reduced, as was proposed in Beshear’s budget.

While disappointed that measures to save on spending were defeated, Beshear said the General Assembly did accomplish three of four of its main objectives in a short special session.

Those items Beshear noted are as follows:

  • Addressing a $1 billion shortfall, while maintaining funding for the basic education formula and higher education, key areas of health care and public safety.
  • Adopting the governor’s economic incentives plan to modernize the state’s incentives programs by investing more in local businesses, attracting a NASCAR Sprint Cup Series race to Kentucky, recruiting more films and documentaries to the commonwealth and help in luring jobs to Hardin County.
  • Enacting legislation to create funding mechanisms for mega-transportation projects such as the bridges in Louisville and Western Kentucky. The funding authorities created also will free up revenues and bonding capacity for transportation projects throughout Kentucky.

Bob White can be reached at (270) 505-1750.