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extraordinary session

2021 Extraordinary Session Wrap-Up

2021 Extraordinary Session Wrap-Up

The Kentucky General Assembly utilized its authority to shape the state’s response to the pandemic during a three-day extraordinary, or “special,” session ending just before midnight on Thursday, September 9. Upon the Governor’s call for a session, we passed bills in both the House and Senate dealing with many aspects of the COVID-19 pandemic ranging from education to public health to boards and commissions. While no action taken during the pandemic will enjoy universal support, republican supermajorities took a balanced approach by focusing on public health, individual liberties, and localized control.

Recently, the Kentucky Supreme Court ruled that a lower court incorrectly blocked laws passed during the 2021 Regular Session that sought to reasonably limit emergency executive authority.  With that, the legislature used this special session to extend some emergency executive actions and eliminate others. New COVID-19 mitigation strategies were also considered to provide relief to institutions strained by the pandemic, including schools, hospitals, businesses, and nursing homes.

Senate Joint Resolution 1 extended specific executive orders, regulations, and other actions. Of particular note is that we did not implement or permit the Governor to issue a statewide mask mandate. For the purposes of federal funding and other regulations that we viewed as essential, we allowed the state of emergency to remain in effect until January 15, 2022. Also, for the purpose of transparency, we are requiring the Governor and state agencies to put all action taken and permitted under this resolution to be posted in a consolidated format on the Secretary of State’s website.

Senate Bill 1 (SB 1) reaffirmed that there would be no statewide mask mandate in schools but instead left that decision to the local school boards. The goals of SB 1 are to prioritize in-person learning, stabilizing school funding, assist with staff shortages, and create conditions for state and local health departments to support local school districts with their COVID-19 mitigation plans based on their own local data and needs.


Under this legislation, the Kentucky Department of Public Health (DPH) would develop a “test-to-stay” model for school districts to minimize quarantining for non-symptomatic students and staff, encouraging students to be in the classroom as much as possible. Additional language in SB 1 provides that the DPH shall assist local school districts in implementing their board-approved COVID-19 plans, whether it concerns a test-to-stay method, masking guidelines, contact tracing, or quarantining.

In consultation with the Governors’ office and the Kentucky Department of Education, we allowed 20 days of remote instruction. Not to be mistaken as Non-Traditional Instruction (NTI) days, these remote learning days are only permissible for a classroom or school, not an entire district. The intent is to allow room for a targeted response in the event of virus exposure.  In light of critical staffing shortages, SB 1 will make it easier for retired teachers to return to the classroom, in some cases as soon as 30 days after retiring. It also provides temporary revisions for the hiring of substitute teachers, background checks, and school schedules.

Senate Bill 2 concerns one of the most heartbreaking parts of the pandemic, establishing safety protocols for loved ones to visit family members in long-term care facilities. This bill defines criteria for a family or friend to be designated as an essential, compassionate caregiver. SB 2 also encourages vaccinations, COVID-19 testing, and greater access to monoclonal antibody treatments, such as Regeneron. 

A provision of SB 2 provides assistance for health care providers, jails, prisons, homeless shelters, and local health departments in acquiring COVID-19 tests. Another provision will allow paramedics to work in hospitals to help relieve a provider shortage.

Senate Bill 3  will redirect more than $69 million from the federal American Rescue Plan Act to the Kentucky Cabinet for Health & Family Services. The money was left over from the repayment of a federal loan to Kentucky’s Unemployment Insurance Trust Fund that was taken out to cover a surge of pandemic-related unemployment claims.

The money will help health care providers, schools, and others implement provisions of SB 1 and SB 2. These include purchasing COVID-19 tests, establishing regional monoclonal antibody treatment centers, and test-to-stay programs in schools.

Senate Bill 5, wholly unrelated to the pandemic, was an economic development incentive bill requested by the Governor and the Economic Development cabinet to only apply to projects over $2 billion. It will utilize existing programs, however, these incentives will be paid out over time to ensure any project meets the required job and wage targets. Some incentives will be in the form of forgivable loans.

Kentucky is in the running for at least one mega project eyeing Hardin County. Language within SB 5 can be compared to state economic development incentives the General Assembly passed in the late ‘80s, which brought Toyota’s first American assembly plant to Georgetown. It is now the world’s largest Toyota manufacturing facility where the Lexus ES350, Avalon, Camry and some hybrid counterparts are assembled.

SB 3 and SB 5 were signed by the Governor, and vetoes of SB 1 and SB 2 were swiftly overridden. Each bill contained an emergency clause, meaning they became law immediately upon the Governor’s signature or upon the veto override.

The legislative process is more challenging and sometimes more cumbersome by design.  We are obligated to debate and question, ensuring that the voices of every corner of Kentucky are being heard and given consideration rather than being summarily dismissed by a governor whose actions have been consistently inequitable and unconstitutional.  We strive to stabilize the system, and this new legislation is an attempt to do so during these unprecedented times. The General Assembly still faces serious budget and policy decisions in the upcoming 2022 Regular Session. Still, we will remain dedicated to finding the best legislative course of action for citizens across the Commonwealth as we continue to navigate the pandemic. 

Thank you for your questions and concerns. I hope you will remain engaged with legislative happenings for the remainder of the interim by visiting www.Legislature.ky.gov or www.KET.org/legislature. It is an honor to serve you in Frankfort. 

2021 Extraordinary Session Bills

2021 Extraordinary Session Bills

As has been covered widely in statewide and local media, the Kentucky General Assembly has been called into an extraordinary session to address the ongoing COVID-19 pandemic. During the weeks since the Kentucky Supreme Court issued its opinion (in the litigation against the bills passed during the 2021 Regular Session limiting emergency executive powers) once again recognizing the role of the Legislature as the exclusive policy making authority in state government, the leadership in both the Senate and the House have worked together, and negotiated with the Governor’s office, to bring a series of bills forward for the legislature to consider. These bills address a number of issues related to the pandemic, including childcare and school settings, healthcare and healthcare workforce matters, liability protections previously enacted by the legislature, and restoring several (but not all) of the executive actions already taken by the governor that most agree need to be in place for a short while longer.

These bill drafts will be on the legislature’s website soon, but I wanted the public to be able to see them as early as possible. I’ve created the general headings for each of the linked PDFs below to help you locate each bill draft by subject matter.

Note:

  1. The economic development bill, known unofficially as BR26 before it gets filed at the start of the Extraordinary Session, is wholly unrelated to the COVID pandemic. This is an economic development bill the Governor has asked us to consider as part of negotiations with a confidential development prospect.

  2. The legislative compensation bill, known unofficially as BR19 before it gets filed at the start of the Extraordinary Session, eliminates legislative pay during veto days during Extraordinary Sessions.

Quasi Quandary

Quasi Quandary

You have probably heard of the imminent extraordinary or “special” session of the Kentucky General Assembly. Included in the Governor’s veto message on HB358 from the 2019 Regular Session was a promise to issue a call for an extraordinary session to address the pension problem for quasi-governmental agencies before July 1. So what is this pension problem anyway?

Quasi-governmental agencies are pretty much exactly what their name suggests: agencies that are not explicitly government departments, but are exclusively (or very nearly exclusively) funded by government (read: taxpayer) funds, and they each perform essential functions for the populations they serve.* These agencies are designated as non-profit organizations. The Christian County Health Department, Pennyrile Children’s Advocacy Center, Sanctuary, and the Pennyroyal Mental Health Center are some of the primary quasi’s in this area, though the last three in that list have a service regions that extend well beyond our own county line.

No other agencies or arms of state government exist to perform any of these services.

A few decades ago, someone thought it would be good to include these agencies in the Kentucky Retirement Systems. I don’t think that’s a bad idea necessarily, and at the time it looked like a very good one. The employer contribution rate for each participating employee was very low. However, with time, that employer rate has climbed up. Today these agencies are paying somewhere in the neighborhood of 49% of payroll. That means, for every dollar of payroll, the agency is having to find another 49¢ to send to KRS. First, for these non-profit agencies, finding that additional 49¢ is very challenging, as it starves out funding for other important needs like adequately compensating staff, procuring important supplies, expanding their critical services (which all our communities need), or even maintaining their locations. Second, the 49¢ is actually way lower than it should be to keep KRS funded adequately. In truth the employer contribution rate should have been steadily climbing for many years.

So, here we are, facing a July 1st deadline when the rate jumps to at least 83% overnight. For other participating employers not deemed quasi-governmental we’ve already passed a solution that phases in that rate increase over time. Cities and counties now have a new imperative to find all the revenue they can to make ends meet. HB358 as passed this year would have forestalled that big rate jump for quasi-governmental agencies for a year while these agencies decide whether and how to proceed, by staying in the system or getting out, both of which would have resulted in increased costs. The veto struck that bill in its entirety, so without a special session to pass something else that offers immediate relief, the rate jumps up come July. With that enormous rate increase comes the almost certain reduction in staff and services for most, if not all, quasi agencies.

We risk the loss of staff and services from a group of agencies that provide services the state is neither prepared nor equipped to provide. The Pennyrile Children’s Advocacy Center performs forensic interviews and provides vital care and services for children victimized by sexual assault. Just a couple short months ago the Christian County Health Department helped administer hundreds of vaccinations for Hep-A after a handful of cases hit the county jail. Sanctuary provides emergency housing and security, among other services, for women and their children in need of escaping physical abuse. No other agencies or arms of state government exist to perform any of these services. PCAC, Sanctuary and the Pennyroyal Center serve multiple counties. If their employer contribution rate goes up in July those service footprints in other areas are at risk of evaporating.

On the other hand, the Kentucky Retirement System needs to be made whole. Even giving cities and counties phase-in relief last year hurt the CERS bottom line. Every day a participating employer or employee (or legislature) doesn’t pay all they’re supposed to, the system and its retirees get shortchanged. We can’t afford KRS going under. We can’t afford these agencies going under. A balance must be found.

We can’t afford KRS going under. We can’t afford these agencies going under. A balance must be found.

The Governor has done what legislative leadership asked following his veto: come to us with proposal. I attended a briefing conducted by his senior staff last week and I raised a number of questions. The bill includes a one year rate freeze for quasi agencies, and grants them that time to decide which path they want to take: stay in and pay full freight, or get out of the system through one of three different doors. I believe the agencies that cannot afford to pay the full price of staying in should get out of the system, but I firmly believe they should be given a way out that is affordable. The proposal provides only one way out that is truly affordable to most of these agencies, called the “hard freeze,” and requires all Tier 1 and 2 (the senior most) employees to be pulled out of the system along with the agency. Those workers will of course keep everything they’ve accrued, but cannot earn any additional time toward their retirement mark in KRS as long as they remain with that employer. I disagree with pulling those folks out of the system. The options that allow those employees to remain are cost prohibitive for all but the most wealthy quasi agencies, and I’m not aware of any agency in the three counties I represent that can afford them.

There are other concerns, unique to certain quasi agencies, including the change to how their payments to KRS are classified. State and Federal grant funds that flow to places like Sanctuary restrict the use of those dollars for costs directly related to personnel, and attached “fringe benefits.” The proposal would require payments from the agencies toward the unfunded liability, not explicitly connected to payroll, making today’s grant dollars used for payroll unavailable for tomorrow’s debt service.

Similarly, there are three community mental health centers, including the Pennyroyal Center, who act purely as hiring agents for the state when staffing certain facilities. Those employees are governed entirely by the state, but they are currently counted against the CMCHs’ unfunded liability. This is not right. Unfortunately, the proposal before us addresses neither of these issues, and I have been given no affirmative assurance that there will be a material, meaningful effort to fix those problems in the 2020 Regular Session.

I’ve asked the Governor and his team to make modest adjustments to the proposal to make the cessation options slightly more affordable, and to address these two issues that directly impact the local agencies for whom I speak in Frankfort. Unfortunately, I have received no feedback that suggests changes to the proposal would be welcome. I will continue to advocate for those changes, ahead of any potential special session, and during the 2020 session if need be. Needless to say, this issue is among the most complicated the legislature has had to deal with. Getting the answer just right is that much more important.

* The group of quasi-governmental agencies also include all public universities in the Commonwealth other than UK and UofL, both of whom have their own pension systems. However, this post is about all the quasi’s other than the universities. These institutions are also vital to the Commonwealth, but they are on a much different fiscal footing than all the others. They are able to raise tuition and fees, they each have private foundations, and generally have more assets than the rest of the quasi group. To my knowledge, the public university group has been satisfied with each version of HB358 that was passed during the regular session and they are in support of the Governor’s proposal.