Bevin says he'll veto budget, tax reform bills

Bevin says he'll veto budget, tax reform bills
Governor Matthew Bevin. (Source: WAVE 3 News)

FRANKFORT, KY (WAVE) - Gov. Matt Bevin announced a rare news conference Monday morning, at which he spoke candidly about Kentucky's budget mess.

The top headline from Bevin came when he said he plans to veto the budget and tax reform bills that legislators passed last week.

"The state is in a financial crisis," he said early in his remarks, adding that Kentucky has "the worst-funded pension system in America."

Kentucky's financial challenges were a big part of Bevin's 2014 gubernatorial campaign, a point he noted more than once at the news conference. Those problems extend well beyond the hotly-debated pension.

"If we're going to do tax reform, and we need to do tax reform, it needs to be comprehensive," Bevin said. "Comprehensive tax reform does not mean everybody gets what they wants."

Throughout the current legislative session, Bevin has repeated the need for "fiscal responsibility," urging lawmakers to stop "kicking the can down the road."

"(In) a budget that has hundreds of millions of dollars in spending that we really can't afford to spend ... the reality is the money is not there," he said. "That is not responsible. That is not wise."

Bevin used an analogy to articulate the importance of not only balancing the budget, but somehow setting aside tens of millions of dollars in reserve for emergency spending needs.

"If you made $50,000 a year, it would not be impractical for you to try to have $1,000 saved," he said. "It's important to have emergency funds. What if something that has happened in recent months in places like Texas or Louisiana or Florida (happens in Kentucky)? If we were to have another 1937-type flood again, we don't have the capacity to pay for it. The money has to come from somewhere."

Bevin questioned the math legislators applied to the budget and revenue bills, insisting the numbers are off and wondering why there is an additional $600 million more in spending than the budget he proposed.

The veto is a move that some said gives them a second chance.

"For us it may be another opportunity, if the veto stands, and that's a big question," Ben Chandler, CEO of the Foundation for a Healthy Kentucky, said.

A big question that Chandler said his group is hoping will be answered by further increasing a 50 cent cigarette tax hike to a dollar or more.

"If we can drive the smoking rate down, we can affect the cancer rate," Chandler said. "In order to do that, we have to have a fairly significant rise in cigarette tax."

But not everyone is seeing the veto as a gained opportunity.

The Jefferson County Teachers Association calls it "nothing short of reprehensible," stating important public school funds were included in the budget that passed.

The group is calling for an override.

Chandler said it is possible legislators could reach the simple majority needed to do that.

"If you can change one or two votes, you'll have a different outcome and they'll be able to override," Chandler said.

Republican leaders said they want the governor to reconsider, and that he has not talked to them about the shortfalls he sees.

In a statement, Democrats from both chambers urged Bevin to veto the pension bill, which was attached to sewer legislation. They add that the governor's decision confirms the budget and tax plan that were passed were wrong for Kentucky.

Bevin did not indicate if he'll sign the pension reform bill lawmakers also passed, but did say that bill falls short of solving structural problems with the state's retirement systems. He says the problem is far from solved.

The governor made one subtle jab at teachers for their recent rallies in Frankfort, giving credit to lawmakers and job creators for doing their parts to help the state.

"They weren't here protesting," he said. "They're working. They're paying taxes."

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