Budget Looms Large as Legislature Enters Week 7

The sixth week of the 2016 Session saw a continuation of contentious budget hearings as the House and Senate both continue to review the Governor’s budget proposal. The biggest points of contention seem to be:
– Large cuts to postsecondary education, which are perceived as a double hit for some campuses as the budget applies performance funding as well.
– The immediate and drastic impact of the 4.5% cuts almost across the board to current fiscal year budgets that would have to come in the last 3 months of the fiscal year.
– The $500 million in surplus from the KY Employees Health Plan and whether it should be used to reduce the budget cuts in the Governor’s bill or in combination with less cuts to fund public employee pensions.
The budget review process will continue as the House and Senate hold more budget hearings in the week ahead.
GLI has a comprehensive legislative agenda for 2016. Below is an update on some of the bills from the agenda:
Key Bills
LIFT – One of GLI’s top priorities was introduced in the General Assembly this week. The LIFT enabling legislation, HB 374, was filed by Rep. Tommy Thompson (D-Owensboro) and the constitutional amendment, House Bill 2, allowing for a local option sales tax was filed by Speaker Stumbo (D-Prestonsburg) and Minority Leader Jeff Hoover (R-Jamestown). We appreciate the support of these important initiatives and will be working with legislators to move the legislation this session.
Education StandardsSenate Bill 1, an omnibus education reform proposal filed by Sen. Mike Wilson (R-Bowling Green), took a step forward this week as it passed out of the Senate Education committee with a committee substitute that makes some minor changes to the bill. In general the major parts of the bill are intact, related to setting up a process for reviewing the state’s education standards and aligning them with the assessment and accountability system. The bill will likely be considered on the Senate floor this week.
School Leadership – One of the key education issues for Louisville and JCPS for the 2016 Session is to give superintendents more flexibility in selection of principals within school districts. Legislation to provide that authority, House Bill 184, sponsored by Louisville Delegation Chair Jeff Donohue, awaits action in the Senate Education committee.
Pensions – Sen. Joe Bowen’s Senate Bill 2 that would make the pension systems more transparent and accountable awaits action in the House State Government committee. There was no action this week on Speaker Stumbo’s House Bill 1, a proposal to shore up the KY Teachers Retirement system with $3.3 billion in bonding. HB 1 awaits action in the House Appropriations & Revenue committee. The state’s troubled public employee pension plans continue to be a leading issue for this session.
Prevailing WageSenate Bill 9 sponsored by Sen. Wil Schroder (R-Wilder), would exempt school and university construction projects of $250,000 or more from the state’s prevailing wage laws. The bill was voted down in the House Labor & Industry committee. Senator McDaniel (R-Taylor Mill) also filedSenate Bill 94 that awaits action in the Senate State & Local Government committee. SB 94 would allow local governments to opt out of prevailing wage for public works. GLI supports the repeal of prevailing wage laws and sees these bills as good steps forward.
Distillery ModernizationSenate Bill 11, filed by Senator Schickel (R-Union), is an omnibus alcohol bill that allows distilleries to sell by the drink and will increase the potential volume of souvenir package sales. The bill awaits action in the House Licensing & Occupations committee. GLI supports placing the distilled spirits industry on equal footing with wineries and brewers in the Commonwealth.
Right To WorkSenate Bill 3, filed by Senate President Robert Stivers (R-Manchester), is this session’s Right to Work bill. The bill awaits action in the Senate Economic Development committee. The legislation would give workers a choice regarding joining a union and remove the requirement that employees pay union dues as a condition of employment. GLI supports this legislation as it is one of our top priorities.
Medical Review PanelsSenate Bill 6, sponsored by Senator Ralph Alvarado (R-Winchester), creates a system of medical review panels to address the escalating costs directly attributed to Kentucky’s uncontrolled medical liability climate. The bill awaits consideration by the full Senate, which could occur in the coming week. GLI supports this legislation.
Felony ExpungementHouse Bill 40, filed by Louisville Representative Daryl Owens (D-Louisville), would allow for the expungement of some non-violent class D felonies while providing provisions that offering protection for employers. The bill would permit roughly 90,000 Kentuckians to better participate in the workforce. The bill awaits action in the Senate Judiciary committee.
Expanded Gaming – GLI took a leadership role in standing with Sen. Morgan McGarvey (D-Louisville) and Sen. Julie Raque Adams (R-Louisville) to support Senate Bill 144 a constitutional amendment legalizing casino gambling and dedicating 90% of the proceeds to Kentucky’s public employee pensions. The bill awaits action in the Senate Veterans committee.
Road Aid ModernizationHouse Bill 69, introduced by Rep Arnold Simpson (R-Covington), reformulates the road fund revenue sharing to a formula of thirds based on population, road mileage, and land area. The bill provides a more equitable share to cities and urban areas, which GLI supports.The bill awaits action in the House Appropriations & Revenue committee.
Of Interest
Workforce Development – This week saw Rep. Larry Clark’s (D-Louisville) House Concurrent Resolution 97 passed the House 95-0 and now awaits action in the Senate Education committee.Senate President Pro-Tem David Givens (R-Greensburg) has a similar proposal, Senate Concurrent Resolution 75. Both are focused on establishing a Task Force to study and develop recommendations concerning the benefits, investments, and funding of workforce education. GLI is supportive of the resolutions and efforts of Sen. Givens and Rep. Clark to bring clarity to how workforce training dollars are spent.
Public Benefit CorporationsHouse Bill 50, sponsored by Representative Kelly Flood (D-Lexington), passed the House and now awaits action in the Senate Judiciary committee. HB 50 permits public benefit corporations in Kentucky, which is a corporation that allows a company’s board of directors to take public benefit into account, in addition to shareholder benefit, when making decisions about the company. GLI is supportive of this legislation.
Kentucky Economic Development PartnershipHouse Bill 216 filed by Rep. Mike Denham (D-Maysville) passed the House 95-0 this week and is now headed to the Senate. The bill would add the chairperson of the Commission on Small Business Advocacy and a representative from the National Federation of Independent Business/Kentucky to the Kentucky Economic Development Partnership. GLI is supportive of helping small businesses let their voices be heard. The bill passed out of the House Economic Development committee this week and could be heard on the floor next week.
Workers Compensation Temporary Total DisabilityHouse Bill 311 filed by Rep. Bart Rowland (R-Tompkinsville) would allow payments of temporary total disability benefits to be offset by wages paid to an employee by an employer for light duty or alternative duty work performed during a period of temporary total disability. Senate Bill 151, an identical bill sponsored by Sen. Steve West (R-Paris),awaits action by the full Senate, which could come in the week ahead.
Limited Liability Entity Tax – Rep. Brent Yonts (D-Greenville) filed House Bill 292, which expands the definition of “cost of goods sold” under the LLET to include any costs allowed by the Internal Revenue Code. The bill awaits action in the House Appropriations & Revenue committee.
Landlord Liability – Senator Ralph Alvarado (R-Winchester) filed Senate Bill 68 to correct a 2012 KY Supreme Court ruling that made a landlord strictly liable for the actions of a tenant’s dog. The bill has passed the Senate and awaits action in the House Judiciary Committee.
Workers Comp Subrogation – Rep. Bart Rowland (R-Tompkinsville) filed House Bill 200 that would clean up statutes related to workers compensation insurance subrogation in favor of employers. This would be a positive change. The bill awaits action in the House Labor & Industry committee.
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