Beth Musgrave, Lexington Herald-Leader

Pablo Alacala / Lexington Herald-Leader

Former Agriculture Commissioner Richie Farmer pleaded not guilty Thursday to federal charges that he misused more than $450,000 of state money and property during his eight years as Kentucky's top agriculture official. Farmer, a former University of Kentucky basketball player whose retired jersey hangs in Rupp Arena, appeared Thursday afternoon with his attorney, J. Guthrie True, at the federal courthouse in Lexington. A grand jury has charged Farmer, 43, with four counts of misappropriating property and money, and one count of soliciting property to influence agriculture department business.

Mike Goins / Lexington Herald-Leader

A federal grand jury has indicted former Agriculture Secretary Richie Farmer for allegedly misusing property and funds during his eight years at the helm of the Kentucky Department of Agriculture. A grand jury charged Farmer, 43, with four counts of misappropriating property and one count of soliciting property to influence agriculture department business. Each charge has a maximum penalty of 10 years in prison and a $250,000 fine. The indictment follows a string of ethical and legal troubles for the former University of Kentucky basketball standout and one-time Republican candidate for lieutenant governor.

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Toyota is planning an ambitious new project for its flagship Georgetown plant that might see it producing a new vehicle and adding 750 jobs. The news came Wednesday when the Kentucky Economic Development Finance Authority gave preliminary approval to $146.5 million in tax incentives for the project, which is shrouded in mystery. Katie Smith of the state's Cabinet for Economic Development told the KEDFA board that the project is a vehicle model that is new to the plant, which would produce 50,000 of them annually beginning in fall 2015. She declined to name the vehicle model.

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A bill designed to help doctors, hospitals and other medical providers receive prompt payments from the state's Medicaid managed care companies awaits Gov. Steve Beshear's signature or veto. Despite passing both the state House and Senate unanimously and having the support of the medical community, Beshear has left open the possibility he may veto House Bill 5 because of concerns that it could cost too much to implement.

A bipartisan nominating commission has recommended that Gov. Steve Beshear consider a state appeals court judge and two other lawyers for an open state Supreme Court seat in Northern Kentucky. The vacancy was created when Kentucky Supreme Court Justice Wil Schroder retired on Jan. 17 after announcing that he was being treated for cancer.

After more than three years of unsuccessful attempts to raise Kentucky's high school dropout age from 16 to 18, House and Senate leaders have struck a compromise that appears poised to pass. The compromise plan would allow school districts to voluntarily raise the dropout age from 16 to 18 beginning in 2014. Once 55 percent of the state's school districts raise the age, remaining school districts across the state would have four years to make the change.

The House passed its version of a state pension overhaul bill Wednesday, along with a proposal to help fund the ailing pension system by expanding the Kentucky Lottery and instant racing at horse racetracks. The funding measure — House Bill 416 — received 52 "yes" votes and 47 "no" votes, falling shy of the 60 votes needed for a revenue-generating bill to become law in this year's 30-workday legislative session. Senate President Robert Stivers, R-Manchester, said Wednesday that the Senate will not accept the bill because it did not get 60 votes.

Child advocates urged members of a Senate panel Wednesday to find money in Kentucky's cash-strapped budget to reverse cuts to a program that helps poor parents pay for child care. When the spending cuts take effect in April, many parents will lose their jobs, kids will be placed in dangerous child care settings and some rural child care centers could close, advocates told the Senate Health and Welfare Committee.

A pension reform bill that would move new state employees to a 401(k)-style hybrid plan and eliminate annual cost-of-living increases for retirees cleared its first legislative hurdle Wednesday. The Senate State and Local Government Committee voted unanimously — 10-0 — on Wednesday to pass Senate Bill 2. The measure now goes to the full Senate.

Senate Health and Welfare Chair Julie Denton, R-Louisville, filed two bills Wednesday to block Gov. Steve Beshear from expanding Medicaid coverage and setting up a health-insurance exchange without legislative approval. The expansion of Medicaid and the exchange, which would provide online information about buying insurance from private companies, are key parts of the federal Affordable Care Act, also known as Obamacare. The health package has come under sharp criticism from many Republicans.

The federal fiscal cliff was averted, but an agreement that delayed decisions about major spending cuts until late February has Kentucky school officials worried about potential layoffs and lost services for needy students. If Congress doesn't reach a compromise on the scheduled spending cuts, Kentucky's 174 school districts will lose $61 million a year in federal support during the next decade, according to numbers generated by the Congressional Budget Office and the Center on Budget and Policy Priorities. Many of Kentucky's gains in K-12 education during the past 20 years could be erased, said Stu Silberman, director of the Prichard Committee for Academic Excellence, a Lexington-based non-profit.

A commission that has spent the better part of a year evaluating Kentucky's tax system recommended a 40-cent increase in the cigarette tax on Monday but no increase in the 6 percent sales tax. Gov. Steve Beshear's Blue Ribbon Commission on Tax Reform also recommended pursuing a constitutional amendment that would allow cities to seek a local-option sales tax for limited periods of time. The local-option sales tax has been requested by city officials for decades as a means to generate revenue for infrastructure improvements, such as new arenas.