Despite the budgetary strife, Kelly said Kentucky may be able to take advantage of that weakness in the national economy.
"Kentucky is actually in a good position to direct economic development," he said. "Because of the worsening situation in places like California, there are businesses looking for a place to go. If we don't overreact, we could put Kentucky on sound footing for the future."
Boosting the cigarette tax
One of the most controversial ways of raising revenues that probably will be discussed during the short session is an increase in the state cigarette tax.
Gov. Steve Beshear has proposed raising the tax as much as 70 cents a pack.
Rep. Mike Harmon, R-Danville, said he is concerned with the rationale behind such a decision.
"It's come up over the years when income has been needed, and the thing that always concerns me is the illogic of it," he said. "You are talking about raising a tax on people that is partly intended to dissuade them from smoking. If that works, you are establishing a model of declining returns, and I would rather establish a revenue source that will not leave big hole in the budget long term."
Like many in the House, newly minted 55th District Rep. Kent Stevens, a Lawrenceburg Democrat, said he is open to raising the cigarette tax.
"I'm afraid we have to take a look at it," he said. "I hate a tax of any kind and my mind is not made up, but it is something I will have to consider."
Kelly said he would view any cigarette tax sent over from the House with skepticism, pointing to the potential negative effects on interstate sales.
"One thing that has not been explained is that a lot of our cigarette revenue comes from cross-border sales because our tax is currently so low," he said. "If we go past a certain point, we will lose that income."
Sen. Tom Buford, a Nicholasville Republican, said he is not necessarily opposed to raising the tax but would only do so with certain conditions.
"I don't have problem with a tobacco tax, but it should be revenue neutral," he said. "If we are going to increase that, we need to lessen the tax on something else."
Cutting costs in education
Education is an area that proponents of the tax have suggested will benefit from the extra revenue.
Harmon suggests that a more helpful action for education would be moving the state's budget process to the short session in the future.
"We have a two-year budget, so it would not help every year, but I would like to see the process moved to the short session. That way, at least in one year, school systems can align their budget-making processes."
Kelly thinks the focus should be on improving instruction and lowering expenses. He said doing away with the current testing system would make education more efficient and less costly.
"Our current system is very expensive and takes up 30-40 days of instruction," he said. "We can put into place a more diagnostic assessment that would make the environment for education better and save about $10 million."
Although he is skeptical whether it could get done during the 30-day session, Buford also would like to see the CATS test end.
"I think it is time that we have a nationally normed test so that we can see how our kids are doing versus those from California, New York and Florida and not versus Hazard or Louisville," he said. "Competition is global now, and we need to know how our students match up."
Improving infrastructure
As for local initiatives, Kelly noted the social and economic necessity of improving infrastructure. He also hopes that the federal government will provide some of the means for making improvements.
"Infrastructure is always vital to attracting the kind of economic development this region needs," he said. "The stimulus package for the states that has been mentioned in Washington could ensure that those projects are completed."
In addition to working for economic stability, Stevens said he will work to both initiate and maintain projects in his district.
"I want to see all of the projects that were promised get completed. I want to really concentrate on protecting the funding for the Agricultural Heritage Center."
Buford and Kelly have each prefiled bills for the upcoming session.
Kelly's bill would provide for treatment for non-violent drug offenders.
"Our prison system is strained, and this is just a smarter way to deal with people who are addicted but not otherwise dangerous," he said.
"It is supervised treatment in what is similar to a minimum-security environment. In six months it will put them on track to working and being part of the community. This also has the potential of saving up to $100 million for the state."
Buford has pre-filed a bill that would make it mandatory that for-profit companies post their intention to re-sell goods on the side of any collection bins for used items.
He said many such collection sites have been misinterpreted as places to leave charity donations.
