LEGISLATURE ADJOURNS - NO BUDGET, BUT SLAMS GAY MARRIAGE

Legislators fail to pass a budget

TAX PLAN FEUD PUTS SPENDING POWER IN FLETCHER'S HANDS

By Jack Brammer And Ryan Alessi

HERALD-LEADER FRANKFORT BUREAU

FRANKFORT - For the second time in three years, lawmakers left the Capitol without a spending plan as the clock ran out on a frenzied session of failed negotiations and maneuvers.

Though both the House and Senate had passed multiple versions of a budget in recent weeks, efforts to compromise repeatedly bogged down on the same point: How much, if any, of Gov. Ernie Fletcher's proposed new tax plan should be included.

Yesterday, the final day of the 60-day 2004 General Assembly, negotiations between the two chambers broke down in early afternoon and never regained momentum.

As a result, lawmakers thrust the power to set Kentucky's spending for the next two fiscal years into Fletcher's hands.

He could call lawmakers back for a $50,000-a-day special session before the new fiscal year begins July 1. But he said last night he has no intention of doing that.

Fletcher would have to execute his own spending plan, as Gov. Paul Patton did in 2002, until the General Assembly convenes in January 2005.

Fletcher said he is "absolutely" prepared to take charge.

Although state operations suffered no lasting damage two years ago, the lack of a formal budget can have ramifications ranging from delays in bonded building and road projects to possible interruptions of state services, House budget chairman Harry Moberly Jr., D-Richmond, said yesterday.

Rep. Bob Damron, D-Nich-olasville, said the state could also see its bond rating lowered, which could raise borrowing costs.

When Patton took over the state's spending in 2002, a court action was filed challenging his right to spend state money in the absence of a budget. But the question was never resolved.

Attorney General Greg Stumbo would consider filing a similar lawsuit if a budget is not forged by July 1, spokeswoman Vicki Glass said.

Yesterday's budget collapse ended what many legislators, including Rep. Danny Ford, R-Mount Vernon, called the "most politically charged" session they've experienced.

Once behind-the-scenes negotiations crashed, lawmakers mopped up some unfinished bills -- including one prohibiting price-gouging during emergencies and another making "destruction of cattle and horses" an animal-cruelty crime.

Their last chance for a budget evaporated when the chambers quit shortly after 11 p.m.

Throughout, the roadblock was Fletcher's so-called "revenue-neutral" tax plan that included a series of tax increases and cuts. It would have raised the state tax on alcohol, tobacco products and satellite TV service. About 125,000 low-income Kentuckians would have been taken off the income-tax rolls, and more corporations would be eligible for taxation, but at a lower rate.
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