FRANKFORT – The General Assembly’s top priority this legislative session – adopting a two-year budget to run state government – entered its final stages late last week, when House and Senate leaders sat down Friday morning to begin looking for common ground that both chambers could support.
While there are a lot of similarities between the two spending plans, there are still some considerable differences.
The starkest is tied to the other dominant issue of this legislative session: our public retirement systems. The House’s and the governor’s budgets would give all of these systems what is called the actuarially required contribution, or ARC. This is the amount they need each year to bring down their liabilities over the next three decades, and it maintains the promise legislators made following 2013 reforms.
The Senate, however, chose a much different approach. Over the next two fiscal years, its budget would reduce the Kentucky Teachers Retirement System’s ARC by about $1 billion – that’s billion with a “B” – and shift much of that money to the retirement systems used by state employees and Kentucky State Police. This would be on top of their ARCs.
Senate leaders say this is necessary because the latter two systems have lower funding levels, but many understandably see it as retribution, since teachers have been leading the charge against Senate Bill 1, the proposed retirement reforms that would affect their profession most.
I want to take a moment to praise those teachers, other public workers and their retirees for their welcome and consistent presence at the Capitol, in our communities and online. They have personified democracy in action, and are to be commended for staying informed and making their views known. I am committed to making sure none of their retirement systems – or their individual pensions – are penalized.
In another major difference with the Senate’s budget, the House’s does much more for education. It sets aside $150 million extra in per-pupil funding, pays for health insurance payments we’ve traditionally covered for school employees and their retirees and does not establish permanent funding for charter schools at the expense of public education. The House budget also protects family resource and youth services centers and our postsecondary schools from the 6.25 percent cuts that most state agencies will have to weather.
Those cuts will follow more than a dozen others over the past decade and further underscore the need for the General Assembly and governor to finally address tax reform. Ideally, our tax system should be broad-based, aligned with our economy and applied so that any exemption — such as tax incentives to create jobs – are beneficial and remain that way.
For now, and assuming a compromise is reached, the House and Senate will vote on the budget either on Tuesday or Wednesday this week. Governor Bevin will then have about a dozen days to decide whether to sign the three branch budgets into law or veto all or some of them. This is the only set of bills in which he can veto specific language while maintaining the rest.
Legislators are scheduled to return in mid-April for two days to decide what action, if any, to take on vetoes he might issue. Once that work is done, the budget will take effect on July 1st.
As that process plays out, the General Assembly moved several other high-profile bills forward last week, some of which are positive while others give me concern.
One that is certainly needed will increase death benefits for state and local government workers killed in the line of duty. This measure is now in the Senate, but if approved there, loved ones of those killed will receive 75 percent, instead of 25 percent, of that employee’s benefits. This primarily concerns first responders, but others doing dangerous jobs are covered as well.
The House also voted last week to make it possible for overdose victims to be detained at a medical facility after being revived. Legislators heard stories about victims relapsing in the same day, so our goal is not just to save lives, but to help addicts move toward recovery.
To counter that epidemic, the Attorney General has filed several high-profile lawsuits in recent months against pharmaceutical companies that have flooded Kentucky with pain medicine. Unfortunately, a bill set to become law will make that tougher, because it will limit that office’s ability to contract with law firms that have the size and expertise to take on these cases and are only paid if a settlement is reached. They will be less inclined to help the state, though, because of this new arbitrary ceiling on what they can earn.
Other bills on track to become law would set new and needed limits on marriage involving teens 17 and younger and close a loophole that now requires some domestic-violence victims to pay for their spouse’s legal fees in a divorce if the spouse is in jail. Another bill likely to become law will unfortunately open another loophole that will make it easier for businesses to profit during states of emergency called by the governor.
We’re just a few weeks away from knowing the final outcome of these and other bills. As we wait to see what occurs, please continue letting me know your thoughts and concerns, both now and throughout the year. My address is Room 432F, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601, or you can send me an email at Rick.Rand@lrc.ky.gov.
Our toll-free message line is 800-372-7181, and if you have a hearing impairment, it is 800-896-0305.