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Governor's 2021 Budget Not As Dire As Once Feared, But It Leans On Federal Aid

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AP Photo/Bryan Woolston
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The first draft of Kentucky's one-year budget, unveiled Thursday by Gov. Andy Beshear, reveals a more optimistic picture than many had feared nearly a year into the COVID-19 pandemic, but majority Republicans worry it relies too heavily on one-time dollars.

"This is likely one of the most important and formative years for Kentucky in a generation, both for our economy and for the soul of our country," Beshear said in a pre-taped address delayed by Wednesday's mayhem at the U.S. Capitol.

The governor's plan envisions a coronavirus relief package in his spending plan: $220 million in small business aid, $20 million for non-profits, and a plan to repay more than $250 million of the state's federal unemployment insurance loan. The Democrat also wants to keep some of his pre-COVID priorities alive with a pay raise for state workers and school employees, along with a 1 percent increase in per-pupil funding.

All of it comes without some of the items often considered poison pills for Republicans and Democrats in the General Assembly.

"My Better Kentucky Budget doesn't rely on any increase in taxes, there are no spending cuts, and it doesn't rely on the passage of any new revenue measures," Beshear promised, choosing to relegate more contentious initiatives like medical marijuana and sports betting to brief mentions near the end of the address.

But while the assessment may sound upbeat, Republican leaders point to one glaring downside: the budget's reliance on one-time funds courtesy of the federal government.

"These numbers have been artificially inflated by billions and billions of borrowed money at the federal level being infused into our state economy, and that worries me," Senate President Robert Stivers told KET. "Are the numbers showing promise? Yeah. But why."

General Assembly leaders have tacked three additional days onto the beginning of the legislative session to get a jump on the spending debate and help pass what House Speaker David Osborne is calling a placeholder "continuation budget."

"That is not indicative what this budget is going to look like ultimately," the Republican said.

Lawmakers hope to use the January recess to work toward that ultimate budget before they reconvene in early February.