KY House releases budget plan one week ahead of Governor Beshear’s

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Kentucky House of Representatives

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Kentucky House Republicans on Friday tabled a two-year state budget bill that includes long-sought pay increases for state employees, sufficient public funding to cover the cost of kindergarten through kindergarten. full time for school districts and the more than $ 4.2 billion required for retirement contributions to funds for state workers and school teachers.

By tabling House Bill 1 on the fourth day of the 2022 legislative session, the House GOP majority secured an unexpected leap over Democratic Gov. Andy Beshear, who is not expected to present his own spending plan to state to lawmakers ahead of its official budget speech next Thursday. .

House Speaker David Osborne, R-Prospect, said his goal was for the House to pass a budget quickly so it could then tackle the complicated issue of tax code changes, which could adjust the amount of revenue. that the State will perceive in the years to come. Some Republican lawmakers want to switch from income tax to sales tax.

The governor’s office did not seem to like the House going forward.

“Today’s actions are worrying because they violate both a long-standing practice and state law. Neither the executive nor the governor has been alerted or consulted, ”Beshear spokeswoman Crystal Staley said on Friday.

“What is more concerning is that the House budget fails to make the game-changing investments Kentuckians will see in the governor’s recommended budget,” Staley said. “For example, the governor’s budget will fund universal kindergarten for all four-year-olds.”

Republican House leaders announced their budget bill in an unscheduled press release after Friday’s adjournment. They then posted the 213-page bill online for public review.

Based on the overall numbers in the bill, the House appears to be taking a conservative approach in some respects.

State economists estimated last month that Kentucky could raise enough revenue for a general fund of $ 14 billion in fiscal year 2023 and a general fund of $ 14.6 billion in fiscal year 2023. ‘fiscal year 2024, with several billion more available in state surplus revenue and federal aid from a COVID-19 pandemic stimulus plan and an infrastructure bill.

However, the press release said the House budget plan would be based on a smaller general fund of $ 13.9 billion each year, with “an ongoing commitment” to save the money available in the Budget Reserve Trust. State “rainy day”.

Federal money provided for pandemic response and transportation infrastructure would be targeted to those specific spending needs, House leaders said.

“For too long the Kentucky state government has viewed the budget as an opportunity to win votes and win favor. This has not been our approach and it is certainly not with this budget, ”said Rep. Brandon Reed, R-Hodgenville, sponsor of HB 1 and deputy chair of the House budget committee.

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Kentucky Representative Brandon Reed, R-Hodgenville Kentucky Legislative Research Commission

“While some would ask that we use one-time federal funds to make recurring commitments, we would pay long after federal funding ends to pay them off,” Reed said. “We are committed to continuing to work to provide safe drinking water, internet access and meet our retirement obligations,” added Reed. “These are fundamental and fundamental concerns. “

An analysis of the House Budget Bill by the Kentucky Center for Economic Policy in Berea suggested that GOP leaders left several billion dollars in funds “on the table unspent.” If all that money went into the state’s rainy day fund, it would be 28% of the general fund, the center said.

“This is a lot more money than the state needs to prepare for the next recession, and setting too much money aside will make our recovery from the pandemic weaker than it can and should. ‘be,’ the center said.

Among the specific items identified in the House budget, there would be money for:

Salary increases for the state government workforce, which is struggling with low morale and understaffing in many different agencies.

There would be annual increases and retention payments of $ 4,800 for social workers totaling $ 25.6 million in the first year and $ 61.7 million in the second; an increase of $ 15,000 for Kentucky State Police soldiers and motor vehicle inspectors; an increase of $ 8,000 for state police telecommunications personnel; and over $ 7 million per year to increase the compensation of public defenders, which currently starts at $ 45,000 per year.

For the rest of the state’s workforce, there would be a 6% increase in fiscal year 2023. No increase is identified for next year, but the personnel secretary of the The state would be responsible for issuing a report to lawmakers on the pay structure for different job classifications. .

One hundred additional social worker positions each year from the budget, for a total of 200. There would also be funding to provide an unspecified number of “extra staff” to the Attorney General’s office and local Commonwealth Lawyers and Attorneys’ Offices. county.

An increase in SEEK Guaranteed per student funding for school districts to “a record amount” from $ 4,000 this year to $ 4,100 in FY2023 and $ 4,200 in FY2024.

However, in its analysis of the House budget, the Kentucky Center for Economic Policy said those numbers are not as generous as they seem. SEEK’s core funding is a mix of money from state and school districts, the center said, and in the House bill, the state’s allocation would increase from $ 2.081 billion. in this fiscal year to $ 2.044 billion over the next two fiscal years.

Twice as much state funding for full-time kindergarten in the two fiscal years, to cover full costs for school districts. Full-time kindergarten was one of the priorities of a school funding task force that met throughout the legislative interim last year.

An increase in state funding for transportation costs for students in school districts from the current $ 214 million to $ 274 million. While this would bring more money to the districts, it does not match the total transportation funding the state once provided.

Over $ 2 billion in actuarial contributions required for the Kentucky Teachers’ Retirement System, which provides pensions to educators. In addition, the state would pay $ 479 million to meet unpaid obligations the teachers’ pension system owes retired educators for sick leave and cost of living adjustments.

The $ 1.2 billion per year in actuarial contributions required for the state’s main workers’ pension fund at the Kentucky Public Pensions Authority. This fund has only 18% of the assets it needs to meet its future liabilities, making it one of the weakest public pension funds in the country. There would be an additional $ 215 million to pay off a worsening unfunded liability for the Kentucky State Police Separate Pension Fund, also managed by the KPPA.

A new pool of annual grants of $ 10 million to the Department of Local Government to enable each state official and state senator to allocate public funds to local governments, educational units and quasi-government agencies in their area. discretion.

The money would be divided according to population, so each senator would have to spend about $ 130,000 and each representing about $ 50,000. While lawmakers can already include expense items in their home district’s budget, if they have the power, this fund would allow them all to distribute checks throughout the year.

Water and wastewater projects in every county that would be paid for with $ 350 million in American Rescue Plan Act federal funds. In addition, an additional $ 312 million in ARPA money would go to the state’s unemployment insurance fund to bring it back to pre-pandemic funding levels.

Just under $ 13 million a year to increase the state’s daily payment to local prisons for each state prisoner they hold, bringing it to $ 35.34. To avoid building more prisons, the Kentucky Department of Corrections has long relied on local prisons – even those that are dangerously overcrowded – to house thousands of felony-serving state inmates.

$ 372 million for this fiscal year and the next two fiscal years to increase state reimbursement to nursing homes, using state and federal funds. The nursing home industry says it has been struggling financially since the start of the COVID-19 pandemic in March 2020.

This story was originally published January 7, 2022 4:03 pm.

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John Cheves is a government accountability reporter for the Lexington Herald-Leader. He joined the newspaper in 1997 and previously worked in its Washington and Frankfurt offices and covered the courthouse beat.
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