FRANKFORT, Ky. (March 17, 2016) — The biggest issue up for consideration this session of the General Assembly is the state budget. The state’s two-year spending plan is the one bill that legislators are required to pass in even-year sessions. That process started when Gov. Matt Bevin presented his budget back in late-January and took another step forward Wednesday as the House passed its version of the budget. Here is a quick rundown of the key points in the House budget that are of interest to KAM members:
Addresses Pension Issue – The single biggest issue the Governor set out to address in his budget is the unfunded liabilities in the state’s teacher and public employee pension funds. The House continued to fund at the same level the KRS pension fund and increased funding in the KTRS fund. This helps address the state’s biggest financial issue.
Restores Cuts to Education – The primary funding formula for K-12 was held harmless in the Governor’s budget, but he did make cuts to some of the education support services like youth resource centers and pre-K. Those cuts were reversed in the House budget.
On postsecondary, the Governor made cuts of 4.5% in FY 16 and 9% each year in FY 17 & FY 18. These cuts were opposed by the university presidents and the KCTCS system. The House reversed those cuts. The Governor also proposed making postsecondary institutions’ funding subject to performance or outcome-based funding beginning in FY 18. The House removed that provision, but set up a steering committee to establish performance funding recommendations for future budgets.
Scholarships – The Governor in his budget moved all lottery proceeds for education to a new workforce development scholarship fund. The House directed all lottery proceeds to scholarships as well, but they utilized the College Access Program (CAP) and KY Tuition Grant (KTG) program for need-based aid administered by KHEAA. The House also funded their Work Ready Kentucky Scholarship Program in their version of the budget. This new program would provide free tuition for graduating high school students attending KCTCS.
Bond Pool Removed – The Governor had provided for a $100 million bond pool to co-invest with local communities to meet the demand for advanced manufacturing jobs and other high skill and information and technology jobs. The House removed that bonding capacity in their version of the budget.
The budget now travels to the Senate where we expect they will be looking to pass their version of the state’s spending plan within the next week, before a conference committee, made up of legislative leaders, meets to hammer out any differences before legislators break for veto recess on March 30.