Wednesday, March 16, 2016

House passes far-reaching state budget

Looking to protect all of education from Governor Bevin’s proposed cuts while fully meeting the state’s commitment to its public retirement systems, the Kentucky House of Representatives voted 53-0 this evening for House Bill 303, the state’s two-year budget. All House Republicans refused to vote on the budget.

“This is a budget that puts education front and center, from preschool to postsecondary education,” said House Speaker Greg Stumbo of Prestonsburg.  “It also will be remembered for providing every single dollar our public retirement systems say they need to pay down the liabilities they face and that must be addressed.  Beyond that, it begins funding a four-year plan to return all coal severance dollars to the counties that generate them.  These counties have truly suffered in recent years because of the decline in the coal industry, and the state is in a position to help them when they need it most.”

House Appropriations and Revenue Committee Chairman Rick Rand of Bedford told the chamber that this budget “strengthens our families, both now and well into the future.  It does that by shielding all of our schools from cuts.  It does that by protecting Medicaid and other programs our most vulnerable citizens depend on.  And it does that by being financially responsible with our tax dollars.  This budget has less debt than what the governor proposed and does not have hundreds of millions of dollars sitting idle or going to undefined uses.  At the same time, it sets aside more funding than ever before in our ‘Rainy Day’ fund for unforeseen costs.  The people of Kentucky deserve to know we are maximizing every dollar they send us, and this budget does that.”

Rep. Rand noted that while Governor Bevin’s budget protected elementary and secondary classrooms, it did not exempt other educational services, such as family resource and youth services centers, dropout prevention, textbooks and teacher training.

The governor’s budget also called for public postsecondary schools to reduce state spending by 9 percent during the next two fiscal years and a comparable amount during the remaining three-and-a-months in the current fiscal year.  University of Kentucky’s president said this would be “draconian,” and other university presidents said it would lead to potentially catastrophic choices.

Neither cut would occur under the House budget, which would return $90 million to elementary and secondary education and $215 million to postsecondary schools.

Under retirement, the House would fully provide what is called the actuarially required contribution (ARC) to the Kentucky Teachers Retirement System – the governor only provided two-thirds of the ARC – and would add nearly $90 million above the ARC for the Kentucky Employees Retirement System.

“We have to get the long-term liabilities for these systems under control, and our plan does that,” Rep. Rand said.  “Under the governor’s plan for teachers, the system would still have had to sell assets to cover their costs, something our plan will avoid.”

Among other highlights, the House budget and its companion bills would:
  • Provide $33 million over the biennium for the Kentucky “Work Ready” Scholarship, a new program that would cover the remaining tuition costs for graduating high school seniors who attend a KCTCS school the following fall.  The scholarship would depend on the local, state, federal and private aid a student receives, but loans would not count against them.  More than 3,000 students are projected to benefit if enacted.
  • Restore $53 million to the needs-based scholarship and grant programs known as College Access Program (CAP) and Kentucky Tuition Grant (KTG).  These lottery-based programs had been flat-lined in the governor’s budget.
  • Add $1 million a year – bringing it up to $3 million annually – for the Kentucky Coal County College Completion Scholarship.
  • Increase preschool eligibility from 160 percent of the poverty level to 200 percent.
  • Maintain all of the slots the state funds to help train tomorrow’s veterinarians and optometrists.
  • Exempt the Judicial Branch from current-year cuts, which would potentially force the courts to close for up to three weeks before the end of June.
  • Reverse the cuts the governor proposed for the Registry of Election Finance and the Executive Branch Ethics Commission.
  • Exempt sales tax costs for drugs used in the treatment of cattle, sheep, swine, poultry and other animals.
“There will be some pain in this budget, because we will let the governor carry out the cuts he recommends for his cabinets,” Rep. Rand said.  “While we wish his administration was more forthcoming in how it plans to do this, we will be vigilant in making sure that critical services are maintained.”

The bills voted on today will now be considered by the state Senate.  After that chamber votes, House and Senate leaders will work on a compromise that, if approved, will be sent to the governor for his signature.

The legislative session is scheduled to end in mid-April.