Monday, March 21, 2011

Special Session - Week 1 Update


Time Marches On...

As we end the first week of the 2011 Special Session, called by the Governor to address a $166 million shortfall in Medicaid and to consider legislation to raise the drop out age, things look a lot different than they did at the beginning of the week. Monday and Tuesday the Governor traveled around the state waging a campaign against the Senate's plan to cut state government and education to balance the Medicaid budget. Senate President Williams countered by challenging the Governor to a statewide televised debate of the issue, which the Governor declined. Needless to say the political rhetoric was at a high point.

As the week progressed, the House held a series of hearings from Medicaid providers and state agencies that detailed the impact possible cuts to Medicaid provider reimbursements and further state budget cuts would have on these various groups from Hospitals to Corrections. These hearings provided informational testimony, but also had the effect of taking the "air out of the ball" and dampening the political environment.

But as we look back now, the legislature has used 5 legislative days and House Bill 1, the vehicle for making changes to Medicaid, has yet to be considered by the House Budget Committee and though Speaker Stumbo and Minority Leader Hoover have been working on a compromise plan to solve the Medicaid budget shortfall, no concrete details have been released and it doesn't appear the Senate has been briefed on the plan.

The Senate released this letter mid-week, which was a restatement of their position during the Budget Conference Committee at the end of the Regular Session with the exception of allowing revenues above cuts to be given back to the agencies that were cut. Since this is a budget issue, HB 1 must originate in the House, so the Senate has been left to wait on the House to act. Majority Leader Stivers alluded to that on the Senate Floor on Friday wondering: "why we're here in the capitol since it has been 9 days and there is nothing from the house that has consensus."

House Plan
The little that Speaker Stumbo has shared publicly regarding the House plan is summarized best in this article by Ronnie Ellis in the Daily Independent:  "Stumbo's plan sets target dates for Beshear to report on progress toward achieving his savings – dates in advance of next January's budget session so cuts could be made early enough in the fiscal year to reach established spending targets."

The action should pick up next week when the House Appropriations & Revenue Committee meets at Noon on Monday to hear "important testimony" regarding House Bill 1 and what is likely further details of the House plan. The House and Senate both plan to convene at 2:00 p.m. on Monday.

What to Watch For
1. Speaker Stumbo may have to gig the Governor next week when the House plan is unveiled. The Governor has asked specifically for the legislature to give him the ability to manage the Medicaid shortfall by moving funds from FY 2012 to 2011. However, it is likely that the House plan is going to impose budget cuts if the Governor can not produce the Medicaid savings.

2. The Governor to appear before the House Appropriations & Revenue Committee Monday. Pure speculation on our part, but it would seem like a nice gift from House Democrats for the Governor to at least get some face time next week after they unveil a plan that isn't exactly what the Governor was hoping for. That being said, this Special Session has been a lot about the 2011 Governor's race so the Governor may appreciate the face time. 

3. How will the Senate react? Will they stick to their guns on across the board spending cuts and if so will this Special Session run through the end of next week for the legislature to work through another budget conference committee? It seems like the Senate is pretty dug in on making across the board cuts, so it isn't clear the House and Senate are any closer than when the Regular Session ended.

Legislative Activity
Neither Chamber took any significant action on the floor on Friday.

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