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Special session ends on sour note

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Senate casts symbolic vote overriding governor's vetoes.

By James Roberts

The special session of the 2011 general assembly ended Wednesday on a sour note, with senators casting a symbolic vote signifying their displeasure with Gov. Steve Beshear's numerous vetoes of House Bill 1 provisions.

"We wanted to be able to override the governor's vetoes," says 14th District Sen. Jimmy Higdon, R-Lebanon.

But House lawmakers didn't return to Frankfort, and it takes both chambers to override a veto.

Instead, the Senate took the only option it had - casting a symbolic vote overturning 19 of Beshear's vetoes and then voting to close the 2011 special session.

51st District State Rep. John "Bam" Carney, R-Campbellsville, said he was disappointed that the House lawmakers "gave away their right to override vetoes."

Carney said legislators worked together on HB1, which aims to plug a hole in the Medicaid budget. Carney said the plan, which drew overwhelming support on both sides of the aisle, would have allowed Beshear flexibility to solve the Medicaid funding issue, but also included some back-up plans in the event enough funds were not saved.

Beshear vetoed large portions of HB 1, among them the provisions that many lawmakers believe crucial to the plan's success.

"In the Senate, we still see that there is a huge financial problem ahead," Higdon said.

Though the state is still classified with an "A" rating, Higdon said, a bonding company downgraded the state's bond rating, citing debt and the absence of significant cuts to prepare for that debt.

Higdon said the lawmakers tried to insert some controls into HB 1. Mostly importantly, he said, were small cuts throughout all state departments.

"We did this to prevent large cuts later," Higdon said.

Beshear vetoed all of those provisions.

"It gives him total control now to do what he sees fit to make the budget balance," Higdon said.

In a 15-page document detailing his vetoes, Beshear said the across-the-board general fund cuts - which total more than $100 million - are not necessary to balance the Medicaid budget. Beshear states that the cuts "would impose an unnecessary reduction in services and programs."

Beshear plans to borrow $166 million from next year's Medicaid budget to help meet the current year's needs. Savings generated in the program next year will make up for the $166 million, Beshear says. Some of the savings will be realized through managed-care plans offered to the poor and disabled next year.

Carney said managed care will save the state money because it offers more control over Medicaid expenses. The plan requires more prescription drugs to be generic and allows the state to bid out services such as X-rays.

But the plan does offer a catch. Companies could offer big savings to help Beshear save the $166 million but not offer those same savings the following year.

While HB 1 did authorize Beshear to borrow the $166 million from next year's Medicaid budget, Carney said, it also provided a back-up plan in the form of cuts, refinancing and savings by scaling back personal service contracts.

"I guess time will tell who was right," Higdon said. "I hope the governor is successful in balancing the budget."

On Wednesday, senators also agreed to return their pay to the state for the 13-day veto period.

That move, Higdon said, was the Senate's answer to Beshear's vetoing a provision in the budget that stops lawmakers from being paid for veto days.

In his veto message, Beshear said that, "It appears that Section 42 of the Kentucky Constitution prohibits the legislature from altering its compensation during any session at which the change in compensation was enacted."

However, senators interpret that law differently.

"We didn't change it," Higdon said. "We suspended it. It made no sense to me for him to veto that provision."

In his veto message, Beshear suggests lawmakers simply return their veto period compensation, which is exactly what senators opted to do. Higdon said that equals $590,000.

House lawmakers adjourned on March 24, before the veto period began.

Though the governor vetoed large portions of HB 1, Carney feels that some lawmakers' major goals were met during the special session.

The No. 1 goal was preventing the predicted 30 to 35 percent cuts to Medicaid due to the funding shortfall. The second goal, he said, was sparing cuts to education.

"We accomplished those goals."