Kentucky General Assembly approves one-year state budget

budget
House Speaker David Osborne, R-Prospect, (center, foreground) presiding during the consideration of HB 352, the proposed state budget plan. Many House members practiced social distancing by watching the proceedings from outside of the chamber

FRANKFORT, Ky. — The Kentucky General Assembly wrapped up its final day before the start of a veto recess by passing a one-year Executive Branch budget.

Lawmakers admitted that the $11.3 billion general fund spending plan—approved today on a final 80-10 vote in the House after being approved earlier on a 34-0 vote in the Senate—is not what they expected earlier this session when a two-year budget with increases for education and state employee and teacher raises had been proposed.

Those plans changed with the slowdown of the economy as a result of COVID-19, House Appropriations and Revenue Committee Chair Steven Rudy, R-Paducah, told the House today.

“The COVID-19 pandemic is putting unprecedented strains on the health of our communities, this commonwealth, our nation, and truly all of the Almighty’s creation,” said Rudy.  “And we have no way to know how far this recession is going to go, how deep it will truly be, and what it will mean to the coffers here in Frankfort.”

The one-year budget found in House Bill 352 as amended by the General Assembly today is based on so-called “pessimistic” revenue estimates that were handed down by economic forecasters last December. Rudy described the pessimistic scenario as the best option, “knowing that it is not pessimistic enough” in light of the current economic downtown.

Although the approved plan meets the state’s obligation to the state Teachers’ Retirement System insurance fund and would allow the system to fully meet its actuarially required pension contribution, it would not include pay raises for teachers or state employees that lawmakers had earlier hoped to provide.

Lawmakers also had to do away with a planned increase in guaranteed per-pupil base funding for K-12 education known as SEEK—although Rudy said current funding levels won’t be reduced. SEEK will remain at $4000 per pupil under the approved budget.

The bill would invest in mental health professionals per school safety requirements found in 2020 Senate Bill 8 while also meeting the state’s commitment under last year’s SB 1, said Rudy. And it would authorize $47.5 million in bonds to assist with construction of four schools listed as priorities by the state.

Other highlights in HB 352 as amended include appropriations of $2.5 million for pediatric research; $17 million received from the Volkswagen emissions settlement appropriated for new school buses and transit buses; reinstatement of a two-percent stop loss in the performance-based funding formula for state postsecondary institutions; $1.6 million in fiscal year 2021 to support medical services at county jails; and debt service for the state Bowling Green Veterans Center, with intent for support of a future facility in Magoffin County, among other spending items.

“I wish I could stand here today excited about this document,” said Rudy. “I think this is the best we can make of this situation at this current time.”

Sharing that sentiment was Senate Appropriations and Revenue Chair Christian McDaniel, R-Taylor Mill, who said the approved bill “will mandate that we are back here in January to finish the second year of the budget.”

“But at that time, it would be all of our hopes that we will have a more stable environment, a better look at the future and a more accurate ability to predict for the commonwealth,” said McDaniel.

Although she admitted having concerns with HB 352 as amended, House Minority Floor Leader Joni L. Jenkins, D-Shively, said the bill is what is required at this point in time.

“As difficult as it is right now I think it helps to remember that our parents and grandparents and generations before them dealt with hardships as well … But they rose to the challenge, and as we’ve shown over the past month so have we,” said Jenkins. “We are in effect buying time, and the hope is that when the General Assembly returns in January we will have a much clearer picture of where we stand, and what should be done next.”

Senate Minority Floor Leader Morgan McGarvey, D-Louisville, voted in favor of the budget and said it was a moment for people to come together.

“I wish there had been more funds for some of the causes I care about, but we will come back and fight for those things when we revisit this issue as late as January, if not in a special session,” he said.  “I expect the governor to veto some of the provisions with which I have a problem, and I hope the legislature will thoughtfully consider his vetoes. We are all in this together.”

Senate Majority Floor Leader Damon Thayer, R-Georgetown, defended the budget plan.

“This budget gets as close to a bipartisan budget as any I have seen during the time I have been up here as we have laid down our partisan armor and put together a budget,” said Thayer.

Also passed by the General Assembly today before the veto break was the Judicial Branch budget and the Legislative Branch and the state’s highway plan, or “Road Plan,” which would still extend over two years. Funding for the Road Plan was included in the state Transportation Cabinet budget, which was also approved today. Highway projects slated as priorities in future years, through fiscal year 2026, were included in a joint resolution approved today.

All legislation passed today now goes to the governor’s desk.