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.

We Should Ban Child Marriage

A bill proposed by Sen. Julie Raque Adams that would provide court oversight on petitions for a marriage license for 17 year-olds (SB48), is set for a second hearing in my committee tomorrow morning, and I plan to call the bill for a vote.

After working with Donna Pollard (Survivors' Corner) and the Family Foundation we have arrived at an amendment to the bill the requires parental consent, but critically requires a court to review the petition to prevent the same kind of abuse that Donna Pollard experienced as a child.

Contrary to what was believed by so many on social media, the bill sponsor and I worked together on this amendment and the bill was never not going to be heard.  I said as much after our first hearing on the bill back in February.  I’m looking forward to seeing it pass committee in the morning and then hopefully be voted on the Senate floor soon thereafter.

For those asking, the amendment (known as a “proposed senate substitute”) is attached below.

Senate Bill 1 - Funding Our Future

Earlier this evening, Senator Joe Bowen (R, Owensboro) filed Senate Bill 1, the much anticipated pension reform bill that seeks to put Kentucky on a path to fiscal solvency and benefit sustainability.  The following press release was issued (the links to the bill and a section-by-section summary is at the bottom):

SENATOR JOE BOWEN FILES PENSION REFORM MEASURE AS SENATE BILL 1

FRANKFORT, Ky. (February 20, 2018) – State Senator Joe Bowen (R-Owensboro) on Tuesday filed Senate Bill (SB) 1, representing the highly anticipated pension reform proposal from the Senate Majority Caucus. SB 1 contains significant changes from the initial pension reform proposal released in October of 2017.

Senate Bill 1 would not force any current or future state employees or teachers into a defined contribution (401(k)-style) retirement plan. It also would not require all employees and teachers to pay an extra three percent of their salary for a retiree health benefit. And, the bill does not create an incentive for employees and teachers to retire at their earliest possible eligibility by ending the ability to accrue more service credit in their current defined benefit plan.
“We are committed to funding our plan, meeting our obligations to state employees, and to making systemic reforms to ensure these systems will be financially sound for current and future employees,” Senate President Robert Stivers (R-Manchester) said. “When this bill passes, we will over time eliminate the unfunded liability that has been estimated to be as much as $60 billion.”

“When a pension reform proposal was first released in the fall of 2017, there were several issues raised by teacher groups, state employees, retirees, and taxpayers,” House Speaker Pro Tem David Osborne (R-Prospect) said. “This plan is our attempt to address many of those issues brought to us. We listened to the concerns, and this bill represents a compromise that will bring our pension systems to the appropriate funding levels over a 30-year period.”

“This bill represents countless hours of work by countless individuals that will directly address the unfunded liability in Kentucky’s ailing pension systems,” Bowen said. “We listened to key stakeholders, experts, and taxpayers, and we are confident our new plan balances the need to stabilize the system while honoring the commitments we have made.”
To access Senate Bill 1 in full, please visit www.lrc.ky.gov.

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Initial Proposed Budget

Every two years the Legislature convenes a "long" regular session, running 60 legislative days.  During this even-year session we draft and vote on the Commonwealth's biennial budget.  This process takes many months, but the document itself gets it first official unveiling when the sitting Governor of the day makes his or her State of Commonwealth address in mid-January.  Last week, Governor Bevin gave his address to a joint session of the Senate and House and the following day the various budget bills were filed in the House (where law requires all appropriations bills to begin) and the legislative process begins in earnest.

Below are the budget bills for you to download and review if you're curious.  The bill must pass the House (where it will certainly change shape), before coming to the Senate (where it will change again), and then customarily a free conference committee is formed (made up of House and Senate members) to hammer out a compromise.  Once a unified version of the bill has passed both chambers it heads to the Governor for his signature or veto.

Pension Bill Draft

As promised, linked below is the draft of the pension reform legislation, along with a section-by-section guide to help navigate the bill, and finally a side-by-side benefit comparison chart.