The 2016 session of the Kentucky General Assembly has passed the midpoint, with legislators on their 34th of 60 available legislative days for this session. Though many legislative efforts continue to move through the chambers, much discussion concerns one thing: the BUDGET.
The House and Senate both continue to hold hearings on Governor Bevin’s budget proposal. Last week, the focus of those hearings was postsecondary education, as the state’s university presidents were on the scene in Frankfort. Their message was simple: the proposed cuts to higher education in the current budget proposal will lead to higher fees and tuition for students.
Neither the House or Senate have divulged the large-scale decisions they will make in their various budget proposals that may impact these cuts to higher education or other state agencies. House Bill 303, the House’s budget proposal, is still being debated and amended before it will be sent to the Senate. Though mid-March has been the traditional transfer timeframe, President Stivers and Budget Committee Chairman Chris McDaniel have already expressed their wishes to begin reviewing the budget sooner rather than later. The biennial budget must be passed by April 15th.
In his proposal, Governor Bevin proposed 4.5% cuts this fiscal year and 9% next year to most state agencies. Many organizations, including GLI, have voiced appreciation for the difficult financial challenges our state leaders face as they consider the next biennial budget. However, GLI has also expressed concern for the needs brought on by 14 years of budget cuts, especially in Kentucky’s universities. Needs in infrastructure, health care, pension reform, education and workforce development are all critical.
Top names in the Commonwealth and beyond have ventured to Frankfort to protect funding allocation. Actress JenniferGarner even made an appearance at a Senate Education Committee hearing. She urged Kentucky legislators to support continued funding of Save the Children’s early childhood programs.
University presidents, including President Ramsey of the University of Louisville, testified the proposed cuts could lead to higher fees and tuition increases for their students. JCTCS could also face higher fees and tuition. GLI is asking that its members voice their concerns to the Jefferson County legislative delegation to protect our educational institutions and soften the blow by reducing cuts that could have long term consequences.
Postsecondary educational needs and other priorities have left legislators and interest groups fighting over a shrinking pot of state funding, resulting in even more contentious budget negotiations. The results of four special elections on March 8th could put Democrats and Republicans in the House into a 50-50 tie before a budget vote, which could further complicate matters.
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Chief among the causes for the budget consternation is Kentucky’s $30 billion unfunded pension liability. In an effort to shore up this liability, Governor Bevin has proposed more than $1 billion for KTRS and an additional $130 million to KERS. Governor Bevin’s Budget Director and former GLI Tax & Fiscal Policy Chair, John Chilton, acknowledged the pain of the budget cuts, but defended them as a necessary to start addressing the issue.
“The unfunded pension liabilities adversely affect state government and hundreds of other organizations,” Chilton told thePublic Pension Oversight Board, “The answers to most of these questions is $30 billion of liability that needs to be reckoned with.”
There has been limited movement among other bills looking to address the pension crisis. Sen. Joe Bowen’s (R-Owensboro) Senate Bill 2, which would make the pension systems more transparent and accountable, has passed the Senate but awaits action in the House State Government committee. There was no action last week on Speaker Stumbo’s House Bill 1, a proposal to shore up the KY Teachers Retirement system with $3.3 billion in bonding. Many in the business community are skeptical of additional bonding, especially since taxpayers have not had the benefit of vetting such a major initiative. This discussion focuses solely on funding and does not include changes to the structure of the pension system.
Beyond the budget and the pensions, hundreds of other bills have been moving between the two chambers but few have passed into law thus far.
Notable Bills on the move:
- Education Standards: Senate Bill1 passed the Senate last week by a vote of 25-12 along party lines with one Republican voting “No.” SB 1 is an omnibus education reform proposal filed by Sen. Mike Wilson (R-Bowling Green), which will set up a process for reviewing the state’s education standards and aligning them with the assessment and accountability system.
- LIFT: House Bill 2, allowing for a local option sales tax was filed by Speaker Stumbo (D-Prestonsburg) and Minority Leader Jeff Hoover (R-Jamestown). It awaits action in House committees.
- Public-Private Partnerships: HouseBill 309, sponsored by Rep. Leslie Combs (D-Pikeville) passed the House by a vote of 83-11 and was sent to the Economic Development, Tourism, & Labor Committee in the Senate where it awaits action.
- Workers Compensation: SenateBill 151, sponsored by Sen. Steve West (R-Paris), was passed by the full Senate 24-9 on Friday. The bill 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.
If you would like to become more involved in GLI’s advocacy efforts, serve on GLI’s issue advisory committees, or attend an advocacy event, visit gliadvocacy.com or contact Sarah Davasher-Wisdom at SDavasher@GreaterLouisville.com or at 502.625.0073. Follow us on Twitter at @GLIAdvocacy