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Kentucky: State must run prison, panel says
Feb. 17, 2005

FRANKFORT - When it finally opens, the state's much-delayed new prison in Elliott County must be run by the Corrections Department, not by a private company, under terms of a preliminary budget bill approved last night by a House committee.

The prohibition -- meant to block Gov. Ernie Fletcher from privatizing the $92 million, 961-bed prison -- was also in last year's budget bill, but lawmakers never passed a final version.

This year's bill, a rewrite of a proposal Fletcher made Feb. 1, could undergo more changes by the time the House takes a final vote. That mostly depends on whether the committee can pass a separate tax overhaul, another Fletcher proposal.

Lawmakers are working against the clock, as the 30-day legislative session enters its 17th day today.

The budget bill passed last night shifted sizable amounts of new money into education funding.

It would put $28 million more directly into elementary and secondary education, and divert $24 million from a proposed program of teacher recruitment and retention into basic education aid. The bill would also increase funding to help students who are falling behind.

Higher education would get $15 million more than Fletcher has proposed.

The committee rejected Fletcher's plan to use about $32 million in coal severance tax proceeds for school assistance instead of for economic development. The bill would leave that up to counties that produce the coal.

Even with the changes, the House bill had few big differences from Fletcher's plan to spend about $15 billion over two years.

Few lawmakers were pleased with what Rep. Robin Webb, D-Grayson, called a "bare-bones" bill.

"This is a horrible budget, but we need a budget," said Rep. Jim Wayne, D-Louis-ville. Committee chairman Rep. Harry Moberly, D-Richmond, add-ed, "I've never seen a more bleak financial situation."

Moberly said House members of both parties are trying to resolve their differences on a tax package that would help finance expansion of the spending plan. Those changes could include money for water and sewer projects and construction projects Fletcher first proposed last year.

Some proposed tax increases in Fletcher's tax plan probably will be trimmed, including higher tobacco and alcohol taxes, Moberly said.

He said some House conservatives are balking at raising the per-pack cigarette tax automatically in future years, on top of a proposed jump from 3 cents to 34 cents. Fletcher's proposal could raise $173 million in 2006.

"We cannot pass his level of tobacco taxes," Moberly said. "Personally, I'm in favor of it, but I think it's going to have to come down some."

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