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February 3, 2020 9:24am

KYGA20: Fourth Week Wrap-up

The fourth week of this long, sixty-day, budget session of the Kentucky General Assembly came to a conclusion on Friday, the 18th legislative day of the session. The tempo of legislative activity significantly picked up during the week.  

Governor’s Budget Proposal

Part of the increase in activity was no doubt because Governor Andy Beshear went before a joint session of the legislature on the night of January 28 and gave his budget address, the full text of which can be viewed HERE. He touted his $24 billion biennial budget proposal as the first in fourteen years that is without General Fund cuts.  

Gov. Beshear termed his proposal, filed as HB 352, an “education first budget,” proposing 1% increases for both higher education and SEEK and restoring funding for textbooks, as well as providing for a $2,000 increase for public school teachers. Beshear proposed increased spending of $109 million on criminal justice issues over the two-year budget cycle, including nearly $40 million for a private prison in southeastern Kentucky. Beshear also continued to point to a need for criminal justice reform to reduce the number of incarcerated individuals, without offering any specific proposals. The Governor’s proposal also includes a 1% salary increase for state employees, funding for 350 additional social workers, and $35 million in bond funding for the University of Louisville purchase of Jewish Hospital.

To fund his budget, Beshear proposed revenue increases, fund transfers and what he termed other efficiencies. The revenue increases are in HB 351 and include a proposed ten cent increase on cigarettes and other tobacco products, new taxes on vaping products, revenue from legalized sports betting contained in HB 137 awaiting a House floor vote, as well as a proposed 29% increase in the minimum tax on limited liability entities. In total, the revenue package raises over $70 million in each year of the biennium.

The reactions of the Republican majorities of the House and Senate to Beshear’s proposals were not enthusiastic. Legislators expressed frustration over the Governor’s failure to brief them or provide a preview of the budget proposal before his address. Legislative Leaders were mostly critical of the revenue portion of his budget proposal, including reliance on fund transfers, the proposed increase in taxes on LLC’s, and the additional tobacco taxes. The revenue side of the budget is the first issue legislators have to grapple with as they begin deliberations over the budget. The House will take the next month or so to review and then make changes based on their priorities.

The Beshear administration also released its road plan this week, which was filed as HB 354. The plan lays out an outline for highway construction and repair, but fails to include any proposals for new revenue for the stagnant road fund. 

The filing of the executive branch budget and revenue proposals will set in motion the legislative budget review process which will dominate much of the remainder of the session. We have prepared an overview of the process, which can be viewed HERE.

Legislative Activity  

A quick update on other legislative activity from the past week:

  • Sanctuary Cities SB 1, the Senate’s top priority that would address the issue of local law enforcement coordination with federal authorities sponsored by Sen. D. Carroll was heard and favorably reported by the Senate Judiciary Committee.
  • Public Assistance Reform – Speaker Pro Tem David Meade introduced HB 1, a proposal to revise public assistance such as food stamps, Medicaid and Temporary Assistance to Needy Families, (TANF) with the stated aim of getting individuals back in the workforce and off the public assistance rolls as quickly as possible. The bill began to receive close scrutiny, including that of business and employer groups who are concerned about provisions for moving individuals off Medicaid onto employer health insurance rolls.
  • Pharmacy Carve Out –  Sen. Max Wise, held a press conference and filed SB 50 to direct the Department of Medicaid Services to establish and directly administer an outpatient pharmacy benefit program for all Medicaid beneficiaries. The proposal is an attempt to address concerns raised by independent pharmacists, mostly centered on reimbursement issues. Rural hospitals, Federally Qualified Health Centers, insurers and others have raised concerns about the impact of this proposed policy shift. SB 50 could be the most significant health care issue addressed this session.
  • Criminal Justice Reform – Activity on criminal justice issues and reform heated up somewhat during the week, though specifics and exact language of much of the expected legislation has not been divulged.
  • Significant developments included a briefing by House Judiciary Committee Chairman Jason Petrie at the Committee’s Wednesday meeting that indicated that legislation dealing with the bail system, PFO, felony theft thresholds, probation and other issues will be forthcoming during the session.  Chairman Petrie told Committee members that reforms are necessary to address the Commonwealth’s increasing incarceration rates that are straining the state’s budget. He warned Committee members of the difficulty of such reforms, however, and urged them to put aside partisan and philosophical differences to address these difficult issues.
  • In his Tuesday night budget address, Gov. Beshear said that Kentucky has a number of challenges but he cited corrections as the Commonwealth’s biggest challenge, citing growth of the state’s inmate population of 40% over the past 15 years while the state has lost prison beds due to crumbling infrastructure.  He described the situation as unsustainable. While calling for measures to address this problem, Beshear provided no specifics and added $109 million of General Fund spending to the Corrections Cabinet budget.
  • Bill introductions of significance during the week included Rep. K. Bratcher’s  HB 327 to permit courts to automatically expunge a charge from an individual’s record where there has been an acquittal or dismissal of charges with prejudice.  HB 327 has been assigned to the House Judiciary Committee and posted for committee consideration. Also filed during the week were SB 128 (Sen. J. Higdon), a funding incentive for local jails that offer programming that results in credits for state inmates and Rep. D. Frazier’s HB 361 relating to the transfer of prisoners between jails.
  • Medical Marijuana – Rep. Nemes announced that his bill, HB 136, will be heard in the House Judiciary Committee on February 12th. There’s a companion bill in the Senate, SB 107, sponsored by Senator Steve West. While the issue has gained some momentum this session, it remains to be seen if medical marijuana will progress further than the 2019 session when it passed the House Judiciary Committee.

Legislative Calendar 

The Legislative Calendar for the session is available online, but here are a few dates to keep in mind under the current calendar:

  • February 17 – President’s Day Holiday (Legislative Holiday/No Session)
  • February 21 – Last Day for Bill Requests
  • March 2  – Last Day to File House Bills
  • March 3 – Last Day to File Senate Bills
  • March 31 & April 1 – Concurrence Days
  • April 2 to 13 – Veto Recess
  • April 14 & 15 – Two Final Legislative Days with Sine Die Adjournment scheduled for April 15