Analysis by the Kentucky Chamber of Commerce
FRANKFORT, Ky. (Jan. 27, 2014) — Week three of the Kentucky General Assembly began with the governor’s biennial budget address, the first step in the process of crafting the two-year spending plan for state government. The $20.59 billion budget outlines the spending priorities for the state’s education system and all state government agencies. Much like the last several budgets, desired spending is higher than anticipated tax revenue. The governor is to be commended for outlining a commitment to primary and secondary education. The budget includes a number of spending reductions for certain state agencies and higher education, but held harmless most health expenditures and economic development. The governor also outlined a number of capital spending projects, but questions remain about the debt associated with these projects and the impact on the state’s already lowered bond rating. For a breakdown of the governor’s proposed spending plan, visit the Kentucky Chamber blog.
With health care costs remaining a serious concern for all employers, the Chamber joined with several business and health care groups to launch a new coalition aimed at addressing the serious threat of meritless lawsuits that take a significant financial toll on medical malpractice liability rates for Kentucky’s health care providers, including nurses, doctors, hospitals and nursing homes that serve our communities. Coalition members joined forces to urge legislators to fix Kentucky’s broken medical malpractice system by creating a medical review panel (MRP) process. MRPs as they are often called in short, serve as an independent, expert panel to review proposed claims against healthcare providers.
As legislators continue to file bills, the list of priority bills for the business community grows. See below for a complete list, and be sure to check the Chamber’s website as bills are added and move throughout the legislative process.
Legislation of interest
Cost of Goods Sold – HB 136 (Yonts) clearly defines the cost of goods sold under Kentucky’s Limited Liability Entity Tax (LLET) which is paid by many small businesses in Kentucky. (Chamber supports)
Charter Schools – HB 85 (Montell) authorizes charter schools in Kentucky. Charter schools are independent schools designed to provide tuition-free public education choices to parents and students. Charters liberate teachers and administrators from red tape and allow more innovation in the classroom. In exchange for this flexibility, charter schools require high accountability, knowing they can be closed if they fail to live up to their charter. (Chamber supports)
Employee Misclassification – SB 81 (Schickel) creates a clear set of guidelines for employers on the definition of an independent contractor. (Chamber supports)
Workers’ Compensation Special Fund – SB 63 (McDaniel) saves employers costs on their workers’ compensation assessments by encouraging one-time settlements on claims before 1996. It would also prohibit the siphoning of funds out of the special fund to fund the day-to-day operations of the Labor Cabinet. (Chamber supports)
School Funding – SB 13 (Schickel) requires that no mandate be placed on public schools without program funding to carry out the mandate. Legislation would include a fiscal note adequate for compliance with the mandate, and no school district would be required to comply with mandated enactments of the General Assembly that do not provide adequate funding.
Public Construction Cost Driver – HB 96 (Donohue) unnecessarily increases costs on public construction projects by requiring construction materials, such as iron and steel, to be produced in the United States, regardless of cost or availability. (Chamber opposes)
Alcohol Modernization – SB 83 (Schickel) continues an effort to modernize Kentucky’s alcohol laws by allowing the expanded sales and production of malt beverages and ciders. The measure also clearly defines the definition of a micro distillery to help start-up companies. (Chamber supports)
School Standards – HB 215 (Kerr) prohibits the Kentucky Board of Education and the Kentucky Department of Education from implementing the English and Math standards, also known as Common Core standards, and the Next Generation Science Standards. It prohibits state officials from ceding control of content standards and assessments and prohibits withholding state funds from school districts who adopt different academic standards. (Chamber opposes)
School Finance – HB 154 (Denham) requires financial reports to be made by school finance officers and the Commissioner of Education. Annual reviews will be required of school district financial reports. Annual training requirements will also be specified for school finance officers. This legislation provides much needed transparency and holds our education system accountable. (Chamber supports)
Raising the Minimum Wage – HB 1 (Stumbo) and HB 191 (Coursey) raises the state minimum wage from $7.25 to $10.10 per hour by July 1, 2016 (HB 1), and $3.00 for tipped employees (HB 191) by July 1, 2015, raising the cost of labor in Kentucky far above Kentucky’s competitor states. The Chamber supports current state law that automatically indexes the state minimum wage to the federal minimum wage, rather than one that puts Kentucky employers at a competitive disadvantage. (Chamber opposes)
Casino Gaming – HB 67 (Clark) and SB 33 (Seum) amend the Kentucky Constitution to allow the General Assembly to submit to Kentucky voters to permit casino gaming. The Chamber encourages the General Assembly to authorize gaming options to provide a much needed boost to the state as well as to recoup the hundreds of millions of dollars being spent annually in casinos in neighboring states. Gov. Beshear noted in his State of the Commonwealth that revenues from expanded gaming could restore some of the governmental cuts Kentucky has made over the past six years. (Chamber supports)
Wage and Hour Litigation – HB 148 (Marzian) creates a new subjective measure deemed ‘equivalent jobs.” An employer not paying the same wages to two people holding potentially different jobs of “equivalency” would be guilty of discrimination and open to lawsuits. Wage discrimination is already illegal. The Chamber opposes arbitrary legal standards that encourage litigation. (Chamber opposes)
Smoke-free Kentucky – HB 173 (Westrom) prohibits smoking in all indoor public places and workplaces and has received overwhelming support from Chamber members. Manager of Public Affairs Ashli Watts appeared on KET’s Kentucky Tonight Monday night discussing the Chamber’s position. (Chamber supports)
Combatting Heroin Abuse – SB 5 (Stine) creates more treatment beds for drug addicts and lengthens prison sentences for drug traffickers. This bill is particularly aimed at the growing heroin epidemic in northern Kentucky and has bipartisan support. The bill passed the full Senate and awaits a hearing in the House Judiciary Committee. (Chamber supports) Utility Cost Driver – HB 241 (Jenkins) causes Kentucky’s electricity prices to increase by classifying coal ash from electric utilities as a hazardous waste and creates excessive state regulations more stringent than federal regulations. (Chamber opposes)
Public Benefit Cost Driver – HB 153 (D. Butler) would drive up the cost of public employee benefits and set a bad workers’ compensation precedent by changing the definition of cancer presumption for firefighters. The measure awaits action on the House Floor. (Chamber opposes)
Tax Reform – HB 220 (Wayne), a tax reform bill, differs from the recommendation of the Governor’s Blue Ribbon Commission on Tax Reform, excluding the corporate income tax breaks the commission recommended. The bill would also raise the income tax rate for persons with adjusted gross incomes of $150,000 or more from 6 to 6.5 percent and raise the cigarette tax to $1.60 per pack from the current rate of 60 cents. Any potential tax reform efforts will wait for Gov. Beshear’s proposal expected later in session. The Chamber supports tax reform that makes Kentucky more competitive and we will keep members apprised as the debate unfolds.
Security Breach Notifications – HB 232 (Riggs) requires consumer notification when a data breach occurs within a company.
Public Schools – SB 89 (Higdon) directs the Kentucky Board of Education to require the Department of Education and all school districts adhere to transparency and privacy standards when outsourcing Web-based tasks to vendors. It permits a local board of education or a school council to supplement the state board-approved academic content standards with higher and more rigorous standards and use them for curricular and instructional purposes.