By Jacqueline Pitts, The Bottom Line
Some of the most prominent and influential policy-makers in Kentucky came together Monday to discuss the fast approaching legislative session and what citizens of the Commonwealth can expect at the Kentucky Chamber’s 2017 Legislative Preview Conference.
The 2017 Legislative Preview Conference, which provided Kentucky business leaders with a rare opportunity to hear many of Kentucky’s top public officials discuss their plans, priorities and predictions before the General Assembly convenes in January, saw record attendance Monday with more than 300 attendees and a packed agenda.
Right-to-Work and Prevailing Wage
Competitiveness issues were also a big topic of the day as legislators discussed their determination to pass legislation making Kentucky a right to work state and repealing the prevailing wage.
The panel also discussed the high price that prevailing wage laws are costing the state on important projects and all agreed that repeal of the artificial wage law will help spur growth and increase the number of projects being done in Kentucky.
Pensions and Tax Reform
Another big theme of the day was what policymakers will do to address the state’s growing pension crisis and reform Kentucky’s tax code.
Panelists State Sen. Chris McDaniel, state Rep. Steven Rudy, State Budget Director John Chilton, and Kentucky Retirement System interim Executive Director David Eager discussed the topics on a panel at the conference, where they all agreed that the two issues will likely not be tackled until later in 2017 when all parties involved have a better picture of what needs to be done on taxes and pensions.
Budget Director Chilton said the comprehensive reviews of all three state pension systems will not be completed by the December 31 deadline, meaning they will need more time to take a deeper look at the problems within the systems and determine how they should be addressed.
The panelists also seemed to agree that while pension and tax reform won’t be completely tied together in a reform package, they will need to be looked at in the same time frame as revenue will have to be examined when determining how to pay for the massive unfunded liabilities of the systems.
In terms of what will be on the table in a tax reform discussion, legislators Sen. McDaniel and Rep. Rudy stated that the tax code needs to be updated for a modern economy and the tax burden on businesses and individuals should be lessened to help attract people to the state.
Moving toward a more consumption-based tax code was also discussed as states like Tennessee and Indiana with lower personal income tax rates and a higher sales tax were mentioned in the discussion.
Kentucky Education & Workforce Development Cabinet Deputy Secretary Brad Montell, Sen. Steve West, and Rep. Bam Carney discussed issues like workforce and the details they would like to see included in a charter schools bill, which would give students and parents more options when it comes to education.
In a charter school bill, panelists said, it is likely to see legislation that sets up pilot projects for charters across the state which will have multiple authorizers to ensure a fair and balanced system.
All officials on the panel agreed that it is important to implement some form of charter school legislation as Kentucky is being left behind, as the state is one of only seven in the country to have no charter schools.
As for workforce, the policymakers and cabinet official all stated that workforce will be a key issue for the state moving forward as Rep. Carney noted the huge importance of a strong workforce to employers and Sen. West said he believes the issue will finally get the attention it needs.
“I think you have the right people, in the right place, at the right time with this administration and atmosphere on this issue,” Sen. West said.
A panel on health care issues spent the majority of their time on stage discussing what they feel is a critical need to pass legal liability reform measures in Kentucky during the 2017 session.
The health care group, including Kentucky Cabinet for Health and Family Services Secretary Vicki Yates Brown Glisson, Rep. Addia Wuchner, Pat Padgett, Executive Vice President, Kentucky Medical Association, and Mike Rust, President & CEO, Kentucky Hospital Association, said Kentucky is out of step with our surrounding states when it comes to tort reform which leaves the state vulnerable to major issues in the health care field and others.
Pieces of legislation discussed to fix this issue include medical review panels, decreasing judgement interest rates and potentially a constitutional amendment to put caps on damages, which puts Kentucky at a competitive disadvantage as all surrounding states have protections for medical providers.
The experts also discussed the continuing drug epidemic in the state and agreed that something must be done to help curb the issue as it is costing government and health providers alike a lot of money while also impacting the lives of thousands of Kentuckians each year.
The changes that will come to Kentucky’s energy sector with the election of President-elect Donald Trump was the main focus of a panel on energy and the environment featuring Kentucky Energy and Environment Cabinet Secretary Charles Snavely, Rep. Jim Gooch, and Dan Byers, Senior Director for Policy, U.S. Chamber of Commerce’s Institute for 21st Century Energy.
Many of the regulations passed down from the Obama administration which have put a strain on Kentucky’s coal industry are likely to be rolled back under the Republican Congress and newly-elected Republican president, the panelists agreed.
Secretary Snavely stated he believes Kentucky will have a fairly significant presence on these issues at the federal level with a friendly Environmental Protection Agency under the leadership of Trump appointing Kentucky native Scott Pruitt to head up the agency.
As spending for the state’s criminal justice system continues to outpace most other areas of state government spending, a panel of experts discussed what can be done in terms of cost-savings corrections reforms.
Kentucky Justice and Public Safety Cabinet Secretary John Tilley, state Sens. Whitney Westerfield and Morgan McGarvey, and state Rep. Joe Fisher agreed that the state is not getting the bang for their buck with the justice system and noted that two-thirds of Kentucky’s inmate population have a non-violent offense, illustrating that the state has a serious drug issue. This leads to taxpayers footing the bill for the prison population and the state is not getting to the root of the problem.
The business community’s role in stepping up and bringing attention to the issue was applauded by the panelists, who said the Chamber driving discussions like the one had at the Legislative Preview Conference will help make progress in the area.
As for solutions, the state officials said they expect a comprehensive bill out of the justice reform task force put together by Gov. Matt Bevin to pass in the 2017 and all agreed that the state’s laws need to be updated and there is no reason it can’t be done in a bipartisan way.
The need to keep Kentucky’s infrastructure in the best condition in order to allow businesses to deliver their products and attract new commerce to the state was the highest priority for the panel of experts discussing the state’s transportation Monday.
Panelists, including Kentucky Transportation Cabinet Secretary Greg Thomas, Sen. Ernie Harris, Chad LaRue, Executive Director, Kentucky Association of Highway Contractors, Inc., and Juva Barber, Executive Director, Kentuckians for Better Transportation, said it is extremely important to keep the state’s funding for transportation projects up to speed so that Kentucky’s well-positioned geography and resources will continue to be a boost to economic development.
Re-evaluation of how the state’s road fund is funded was also a topic of discussion as the state’s gas tax revenues are on the decline with more fuel-efficient and electric cars on the road along with new technologies bringing in less money at the pump. The experts stressed that it is important to begin looking at the issue before the state’s infrastructure gets left behind.
For more state government news go to the Kentucky Chamber of Commerce’s The Bottom Line blog.