Louisville Courier Journal
Gov. Andy Beshear has had his opportunity to present and pitch his two-year budget proposal for state government.
Now the Republican supermajority in each chamber of the Kentucky General Assembly will get its turn.
Budget committees are continuing to meet this week to develop a version of a budget bill that is likely to look quite different than the Democratic governor’s.
House Appropriation and Revenue Committee Chairman Steven Rudy, R-Paducah, told reporters last week there will be “significant changes” to Beshear’s proposal in the House version of the budget, which could move out of the chamber by the end of this month.
Rudy said he expects the Senate to make considerable modifications to whatever budget passes out of the House, with the budget’s final form to ultimately coming from a conference committee of members from both chambers.
State Budget Director John Hicks faced the Appropriations and Revenue committees of the House and Senate for three hours last week, where he was peppered with questions about Beshear’s proposal.
Here’s a rundown of some of the biggest concerns about Beshear’s budget proposal from Republican legislators and possible changes that may soon emerge in the House version of the budget:
Beshear’s budget proposal includes $147.7 million of new tax revenue through four measures he assumes will pass through the legislature this session — none of which are for certain.
They include a 10-cent increase on tobacco product taxes, a new tax on vaping products, taxes and fees from legalizing sports betting in Kentucky, and raising the minimum tax on limited liability entities from $175 to $225.
Sen. Chris McDaniel, R-Taylor Mill, the chairman of the Senate Appropriations and Revenue Committee, said last week the revenue amounts to “fake money,” because it’s not realistic to assume these tax measures will pass.
Responding to these criticisms, Beshear said all but one of these measures are based on a bill filed by a Republican legislator, calling their inclusion “responsible” and his revenue estimates “moderate to conservative.”
House Bill 137 to legalize sports betting passed out of committee unanimously early in the session but has not yet received a vote on the floor, prompting concerns from supporters that conservative Republicans opposed to gambling may block it from a vote in either chamber.
Republicans have also filed bills in the House to raise taxes on tobacco and vaping products, though none has been voted out committee yet.
Beshear noted that House Bill 32, from Rep. Jerry Miller, R-Louisville, adding a 27.5% excise tax on electronic cigarettes, would actually raise considerably more revenue than his own proposed tax increase on vaping products. The governor’s plan would raise $8.8 million each year, while Miller’s — scheduled to be heard in committee Tuesday — would raise an estimated $35 million in the first year alone.
No one has filed a bill to lift the minimum tax on limited liability entities as Beshear proposed — which he estimated would raise $8.2 million each year — and Republican leaders were quick to denounce the idea after the governor’s budget address.
Adding social workers
Citing a need to reinforce Kentucky’s child protection efforts, Beshear’s budget added $31.5 million to hire 350 additional social workers.
However, several Republicans questioned the logic of this move in their questioning of Hicks, noting the Cabinet for Health and Family Services has trouble filling social worker positions that are now vacant.
Hicks told legislators the main reason the state can’t retain social workers is their overwhelming case loads, and the hope is that hundreds of additional employees will improve working conditions and retention.
Rudy said the administration’s intent is well-meaning, “but I think we may have to reevaluate that process,” as there are many social worker openings now and “adding more if no one’s applying is not really a solution.”
Raises for non-teacher school workers
While Beshear’s budget would fulfill his campaign pledge to give every public K-12 teacher a $2,000 raise, Republicans have also questioned why other employees of schools are not getting a bump in salary.
Republican Senate President Robert Stivers criticized the lack of raises for non-teaching personnel such as school bus drivers and cooks after Beshear’s address last month, saying “those individuals who provide a lot of the services in the school systems seem to be the forgotten ones.”
Beshear said last week that teacher salaries were directly addressed in his budget because of the teacher shortage in the state, which he called a “crisis.”
The governor also said his budget’s $88 million to increase per-student K-12 funding by 1% and $22 million for new textbooks could free up money for local districts to give those employees raises on their own.
After Hicks was questioned by legislators about the lack of raises for other school personnel last week, Rudy said that “there seems to be a lot of interest in spreading out raises across the board rather than just focusing on one area.”
School safety funding
Beshear’s budget proposal partly pays for the unfunded mandate of the school safety bill passed by the General Assembly last year, though Republicans have discussed adding those considerable funds back in.
Beshear provided bond funding of $18.2 million to cover physical security improvements to school buildings as required under the bill, but expressed regret that there was not enough money to immediately cover the estimated $121 million of annual costs to hire additional police officers and mental health counselors at each school.
McDaniel said he would like to see that added to the budget, as it was a big priority for legislators last year and shouldn’t be pushed off for later years.
House Speaker David Osborne, R-Prospect, said Friday that fully funding the school safety bill “is an issue we’ve been committed to for some time” and “is a very important issue to our caucus.”