Budget & Revenue Bills

(Update – 4/3/18 – 1:12pm CST: Replaced incorrect revenue bill summary document)

Linked below are the Free Conference Committee Reports for both House Bill 366 (revenue) and House Bill 200 (executive branch budget).  Both bills have passed through the legislative process and the veto recess has begun.  Because the bills passed before midnight on Monday, before the veto period started, the legislature has retained is ability to override any vetos.

Both bills represent a compromise for me in a number of ways, but ultimately, I am willing to support both because I do not believe we can cut enough from state spending in other places to make ends meet on many critical government services affecting public safety, public education, infrastructure and social services to name a few.  Passing this tax overhaul lowers personal and corporate tax rates, and begins taking steps toward a consumption-based tax system (that still preserves exemptions vital for low income earners).  Again, I do not agree with everything in the tax reform bill (HB366) but I was willing to support the proposal as a whole.  As a result of the compromise tax plan we have been able to pass the first structurally balanced budget in more than 20 years.  In other words, we have not used any one-time funds for recurring expenses.

Some of the highlights of the budget and revenue bills:

• The budget lowers the personal income tax for all Kentuckians to a five percent flat rate, it does NOT raise income taxes.
• This budget does NOT raid the employee health fund for outside purposes, and will instead use some of those funds for the benefit of state employees by shoring up pensions.
• We fully fund KTRS, KERS, and SPRS pensions as required by actuaries—over $3.4 BILLION over the biennium from General Funds.
• There will be NO funding for legislators’ retirement systems and those funds will be redirected to the unfunded liability in the SPRS.
• Budget Reserve Trust Fund (Kentucky's "rainy day" fund) at $304 million
• Veterans Affairs and the Kentucky State Police will have no funding reductions.
• KSP will receive authorization for lab updates and vehicle purchase funding.
• Provides an additional $1 million/year for KSP forensic lab tech salary increases
• Provides record SEEK per pupil funding levels & restores SEEK transportation funding
• Approximately $11.5 million per year will be allocated for cancer screening and research
• Approximately $7 million/year research and screening to be shared equally by UK and UofL
• $500,000 per year for both ovarian and colon cancer screening
• $2.5 million/year will be allocated for pediatric cancer research
• Smoking cessation will be allocated $7 million
• Funds the KY Mathematics Center, the WKU Mesonet, and provides an additional $31 million each year for performance-based funding for colleges and universities
• Appropriates approximately $56 million in Tobacco dollars over the biennium to the Early Childhood Development Fund with funds designated for foster care, adoption, and public health
• Adds approximately $28 million in support per year to increase reimbursement rates for private child caring agencies
• Allocates an additional $11 million each year to increase social workers’ salaries
• KCHIP will be fully funded with an additional $12 million allocation
• FRYSCS funding is fully restored
• Restores $7.5 in funding for the Preschool Partnership Grant Program

Both of those bills are lengthy so I have included summaries of the bills here below.

The Homestretch

The final two days of the 2013 Regular Session are upon us, and despite the good work that has been accomplished over the course of the 30-day "short" session, pension help looms large. The debate continues between whether the pension payment can be made within the context of the budget we have or the budget we'll write next year without raising taxes or expanding gaming revenue, or whether some combination of new tax and gaming revenue will be needed. While I certainly believe the former, time will tell whether the General Assembly as a whole can reach that conclusion. I will continue to fight for public pension solvency and for the funds to be fully paid their due, without raising taxes or expanding gaming. The days of robbing from Peter to pay Paul must come to an end. I do not expect any significant pieces of legislation to crop up that haven't already been on the radar for some time. Most recently, HB279, the Kentucky Religious Freedom Act, which was vetoed last Friday by the Governor is back in the hands of the General Assembly for a possible veto override. The Senate leadership has already pledged to override the veto and I will certainly add my own YES vote to the tally that was 29-strong when we passed it the first time. However, as the bill originated in the House, the action to override the veto must also begin in the House. 82 Representatives voted for the measure a few weeks ago - more than enough to override the veto. I hope that all 82 demonstrate their desire for the bill to become law and move for the veto override vote to be taken.

As we wind down I have already begun to prepare for a busy interim period (the months between legislative sessions). The work of the General Assembly continues as joint committees begin studying issues to be taken up during the next legislative session. While I have not yet participated in interim committee work, its clear that the meetings are of immense value. Much of learning, studying and compromise that happens in Frankfort takes place during the interim. Senators and Representatives can hear from folks about various topics, ask questions, take meetings with stakeholders (on any or all sides of an issue) and hammer out compromise legislation. Several of the landmark pieces passed this session are the product of such teamwork and study over the interim, including HB7, the university bonding bill, HB3, the human trafficking bill with a "safe harbor" provision, and HB217, the adjustments to 2012's "pill mill" bill. All three were enormous pieces of legislation that needed many months of discussion and debate to get just right. All three also passed with overwhelming bipartisan support in both the lower and upper chamber. If issues were left from last year's adjournment and the General Assembly took them back up when we gaveled in a year later there would be little hope for achieving as much progress.

In the 2013 interim I plan on focusing my effort toward the Juvenile Code Reform task force, which I co-chair with my friend and hometown colleague Rep. John Tilley. John and I have already begun preparing for the task force's work, including meeting with an outside nonprofit foundation who has assisted other jurisdictions in updating their juvenile code. The work of this task force is critical in shaping the legislation that directly impacts Kentucky's children. We have a chance to create a system that punishes when necessary, but also saves and redirects young lives on a path that hopefully doesn't lead to incarceration as an adult.

The Joint Committee on Judiciary will also be meeting during the interim and the schedule for those meetings is being finalized as I type. The agenda has not been finalized but may cover topics from the death penalty and expungements to penal code reforms, and will also benefit from the work of the Juvenile Code Task Force. I look forward to this work, but certainly not because I enjoy being away from home. What I look forward to is the idea of meaningful progress in policy areas where much work is needed for the benefit for all Kentuckians.

I want to accomplish as much as possible over the interim so that we can hit the ground running in January when the Senate resumes its work for the 2014 Regular Session. The value of our interim work is underscored further by the reminder that we'll have a budget to pass in 2014 and (barring an unforeseen change of plans in the Senate in these last two days) redistricting - two issues that are almost certainly going to monopolize our time. I don't want the marquee troubles to drown out the good work we can be getting done.

Week In Review - February 8

FRANKFORT – The Senate wrapped up the first week back passing several pieces of strong legislation that illustrate our priorities. And as next week unrolls, you will see an entire package of fiscally conservative, pro-family bills pass the chamber. Many of you have heard about the huge unfunded liability in our public pension employee system. Senate Bill 2 is step one in addressing one of the greatest public policy challenges facing our state. First, please understand that the bill makes no changes to teachers’ retirement, does not impact those currently employed or retired, and does not create a new tax on pension income of either private or public employees. What it does do is create a sustainable retirement benefit for state employees by creating a new hybrid cash-balance plan for future employees.  The legislation provides the guarantee of at least 4% return of the money put in by the worker. Further, the employee can take any funds accrued with them if they change jobs. It recommends the full funding of the actuarially-required contribution to the retirement system which will occur next year when legislators work on the state’s biennial budget. This issue must be addressed now because every dollar needed to pay for pension benefits is a dollar unavailable for another worthy purpose. SB 2 will stop the bleeding.

Everyone who knows me knows how much I am invested spiritually and intellectually in the pro-life cause. It was entirely appropriate for me and others in the Senate that we marked this, our first week back, with the passage of Senate Bills 4 and 5. Thursday was Right to Life Day in the Capital where hundreds of people of all ages came out to listen to inspiring speeches and talk to legislators about their core values. That same day, we passed legislation to provide as much information as possible to the woman considering an abortion. Senate Bill 4 requires a face-to-face meeting between a woman contemplating an abortion and her doctor 24 hours before the procedure. It is shocking to me that this type of counseling is often done through a recorded message on the phone. Senate Bill 5 directs the provider to offer the ultrasound image of the baby to a woman prior to an abortion. The viewing is not mandatory but it is informational. Ultrasounds are standard before these procedures anyway. These are commonsense bills that protect women’s health and well-being while recognizing the sanctity of life.

Finally, we heard mid-week from the Governor on his legislative priorities. I am concerned that he indicated a desire for more revenue, which in government-speak means higher taxes. I am open to hearing the different points of view but I am opposed to increasing taxes, particularly to fund the pension system when taxpayers aren't the reason the funds are in such bad shape to begin with. We need a tax code that will create jobs, not fund bureaucracies. More importantly, Frankfort must prove it can be a good steward of the resources is already has before demanding more revenue.

Next week, I’m looking forward to the passage of SB 10 which places a ceiling on the state’s debt. There is also a planned vote on SB 6, a bill that passed through my committee this week, which will stiffen penalties for heroin dealers. Finally, this week I filed SB 104 and SB 105 which eliminates project labor agreements and the prevailing wage, and would save state and local governments many millions of dollars that can be best directed toward meeting critical needs, education, cost of living adjustments, pension contributions and other services. You can always contact me, or any legislator, toll-free at 1-800-372-7181, email me here, or follow the progress of the General Assembly by bookmarking this site, or by checking out the Legislature's site at www.lrc.ky.gov .