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Public Policy: ‘All the Things I Could Do If I Had a Little Money’

Legislature returns to Frankfort for a 60-day budget session

By Bob Babbage and Rebecca Hartsough 

For this year’s legislative session, there’s no rest for the weary in Frankfort. The Jan. 2 starting date means all 138 House and Senate members will be hard at work for the 60-day session as soon as we ring in the new year.

The Two-Year Budget 
This session, all eyes are on the budget. Every even calendar year, the General Assembly puts together the state’s two-year spending plan. The daunting task is led by House and Senate Appropriations and Revenue Chairs Rep. Jason Petrie (R-Elkton) and Sen. Chris McDaniel (R-Ryland Heights) and Vice Chairs Rep. Brandon Reed (R-Hodgenville) and Sen. Amanda Mays Bledsoe (R-Lexington).

Although both chambers must agree on the final budget proposal, the Kentucky constitution requires that the budget must originate in the House, giving it the first-mover advantage. In recent years, the House budget has dropped the first week of session, providing lawmakers and Frankfort insiders a very early window into the chamber’s priorities.

Chief among those priorities is the desire to meet the statutorily required triggers for continued state income tax reductions. The failure to meet the revenue trigger at the last evaluation means that every spending request and every appropriation is receiving substantial scrutiny and analysis. Some leaders in Frankfort are already stating that the likelihood of another half-point reduction may not be possible for another couple years.

Even though the “rainy day fund” is cash rich and the financial outlook for the state is better than it has been in years, House and Senate leadership are still very deliberative in their spending process. Getting to a 0% state income tax rate is a long-term goal of the GOP supermajorities, and achieving it makes spending decisions that much more difficult.
Nonetheless, the common refrain remains, think of “all the things I could do if I had a little money.”
Education is an area always top of mind for legislators. As this year is a budget year, funding is always the prime topic. House and Senate Education Committee Chairs James Allen Tipton (R-Taylorsville) and Steve West (R-Paris) are focused on how their committees can help improve the education outcomes of all Kentucky students.

Public school advocates are pushing for funding all-day kindergarten and salary increases for teachers. School choice legislation is a top priority for many in the GOP supermajorities, especially in light of the recent Kentucky Supreme Court decision ruling the 2023 school choice expansion bill unconstitutional.
Economic Development 
Over the interim, the House and Senate Economic Development Committees have explored multiple avenues to generate more business and investment in Kentucky. Meetings have included proposals for various tax incentives ranging from investment tax credits and property tax abatements to industry and place-based incentives.

Rural development initiatives have also been a prime topic of discussion. Proposals to enhance support for entrepreneurs, increase access to broadband, modernize agricultural practices, and tourism development are all possibilities for this session. Energy grid reliability is also a top priority as is transparency on workforce development programs.

Senate Committee Chair Max Wise (R-Campbellsville) will work with his new House counterpart (who as the time of writing is still unnamed) on these important issues. Current House Chair Russell Webber (R-Shepherdsville) is resigning from the House to become the state’s Deputy Treasurer.

The House and Senate Judiciary Commit-tees are expecting signifi-cant agendas this session. Led by Rep. Daniel Elliott (R-Danville) and Sen. Whitney Westerfield (R-Crofton), the committees have had lively hearings on hot-button issues over the interim.

Top of consideration is the SAFER Kentucky Act, championed by the Louisville House GOP delegation. Among the proposed provisions intended to improve public safety and reduce crime, the current draft increases penalties for violent offenses, creates new policy for carjacking, prohibits the use of charitable bail funds for bail set over $5,000, and increases penalties for knowingly distributing fentanyl.

A December hearing on the Crisis Aversion Rights Retention (CARR) bill also generated significant attention as gun reform advocates push to create a pathway for temporary firearm removal for individuals in crisis. Child-support statutes are also expected to receive attention.

Local Tax Reform 
Modernizing Kentucky’s local tax codes so that local governments have more revenue-raising options and flexibility to shift tax burdens has been a recurring theme in the General Assembly for many years.

The move toward a constitutional amendment to allow for local tax modernization has long been led by Rep. Michael Meredith (R-Oakland). His legislative framework passed the House in 2022 by a wide majority before failing to move in the Senate. A similar proposal is expected to resurface in the 2024 session. If it passes, the proposed amendment will appear on the November 2024 ballot.
The Health Services Committee agendas are always jam packed with major issues affecting the state residents and this session is no exception. House Chair Kimberly Moser (R-Taylor Mill) and Senate Chair Steve Meredith (R-Leitchfield) consistently work on policies to improve health outcomes and increase access.

Legislation designed to reduce prescription and service delivery delays is anticipated as are new policies to enhance maternal health care. Increased funding for rural and urban healthcare deserts as well as pharmacy benefit manager reforms are all top topics.

Federal Grant Match Dollars 
The billions of federal dollars targeting areas that experienced economic downturns due to fossil fuel job losses and energy shifts are also expected to receive attention from the General Assembly. Many in these impacted areas report that even though federal grants and funding programs are available, these areas are too impoverished to come up with the necessary local match.
To alleviate that issue and better leverage federal dollars, the legislature established the GRANT Program, sponsored by Rep. Richard Heath (R-Manchester), designed to provide matching dollars for federal grants in these areas. With grants for infrastructure, housing, STEM education, public health, substance-use disorder recovery, energy sustainability and more, the question becomes how much money the legislature will appropriate.

With the confluence of crucial priorities, leaders at the top carry a heavy responsibility all year long.

Senate President Robert Stivers (R-Manchester), the President Pro Tem David Givens (R-Greensburg) along with the Majority Floor Leader Damon Thayer (R-Georgetown) must constantly rebalance and complete the work plan, especially the two-year budget commitments.

Likewise, House Speaker David Osborne (R-Prospect), Speaker Pro Tem David Meade (R-Stanford) and Rep. Steven Rudy (R-Paducah), the floor leader, work day and night to analyze and orchestrate several hundred proposals in the form of the state budget and various bills.