Since House and Senate leaders announced Thursday morning that budget talks had stalled, there have understandably been many questions from the public about what happened – and what is likely to happen next.
If the conflict could be boiled down to a single word, it would be “education.” The House believes that, in an era where there is money to meet our core needs and fully fund contributions to our two main public retirement systems, schools and universities should not be cut.
The silver lining is that there is still time for the General Assembly to reach a compromise. Although legislators are not at the Capitol this week because of the veto recess – a roughly 10-day period in which the governor decides whether to sign bills into law or reject them – a budget could be approved on April 12th, the legislative session’s 60th and final day. I am committed to making sure this occurs.
To understand how we reached this point, it helps to go back to late January, when Governor Bevin presented his two-year budget proposal, the first of his administration.
Although state revenues have grown more than four percent this fiscal year and are poised to rise by a combined $800 million over the next two years, he recommended that a large portion of state government reduce spending by nine percent next year and maintain that level in the budget’s second year. He also called for a corresponding cut for this fiscal year, which ends June 30th.
His proposed cuts exempted Medicaid, public-safety measures and per-pupil funding for students in elementary and secondary school. However, these cuts would have an impact on other education spending, including family resource and youth services centers, textbook purchases and professional development.
His plan also called on our public colleges and universities to reduce spending in the same manner as the state, a move one university president said would be “draconian.” It’s estimated this could add an average of more than $1,000 per year to tuition costs at our public universities. This would also occur at a time when nearly every other state is investing more in these institutions.
Every budget proposal offered by the governor, the House and the Senate would dedicate much of the money from these cuts to the two state retirement systems used by our state employees and teachers. Both systems have seen their funding levels drop significantly because of the 2008 recession, and while there is no problem in the short-term regarding benefits, it could be catastrophic for the state in a decade or two if we don’t act now.
Not all of the money in the governor’s budget cuts would go to retirement, however. He also would like to see the state’s “Rainy Day” fund top a half-billion dollars by the end of the budget cycle, or more than double its current level; and he also would like to take another half-billion one-time dollars from the state’s health insurance trust fund and set that aside for what he said would be for future pension costs.
This is the area where the disagreement is centered. The House supports the governor’s plan to scale back a broad section of state government by nearly 10 percent, but we think it is wrong to ask our children and college students to bear the brunt of these cuts while hundreds of millions of state dollars sit unused in a bank.
The House budget showed there is a better way. Our plan gave both retirement systems everything they say they need for the next two years and provided more than the governor’s and Senate’s plans. Our chamber was able to do it without cutting any part of education and with less debt than the governor’s budget. We even funded a new plan that would make it possible for high school seniors to attend a KCTCS school tuition-free for two years, after accounting for scholarships and grants. We also left the “Rainy Day” fund with more money than it has ever had.
During negotiations, House and Senate leaders made some concessions toward a compromise, but the Senate and the governor continued to insist that higher education be reduced at least some. Unfortunately, Governor Bevin began making that a reality on Thursday, taking a 4.5 percent annual cut out of postsecondary education’s final quarterly contribution from the state.
As we wait to see if the House and Senate can reach a final resolution on the budget, it is worth emphasizing that both chambers did pass several far-reaching laws this year. Those will do such things as reduce the number of repeat DUI offenders on our highways; give the state and local governments a new tool to work more closely with the private sector to build large projects; and set the state on a path to test rape kits much more quickly. There are many more that I will cover in a future column.
During this veto recess, I encourage you to let me know your thoughts on the budget and any other legislation we have debated. To reach me, my address isRoom 366B, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601; or you can email me at Rick.Rand@lrc.ky.gov.
To leave a message for me or for any legislator by phone, please call 800-372-7181. For those with a hearing impairment, the number is 800-896-0305.
I hope to hear from you soon.