McCoy: House-approved budget goes to Senate, funds pensions, education

By CHAD MCCOY
50th District State Representative

Saturday, March 3, 2018 — This week, the Kentucky House of Representatives passed the two-year budget, aimed to set Kentucky on a robust path for the future, by a vote of 76-15. The $22.5 billion package is a comprehensive, thoughtful plan that includes full, and higher-than-ever funding for the state’s ailing public pension plans, which have widely become known as-among the country’s worst funded systems. Simultaneously, the House budget creates historic funding levels for the SEEK formula, which is responsible for allocating funds for local school districts. The package, made up of House Bills 200, 203, 204, and 366, also funds a substantial $246 million investment in the rainy day fund, which is the state’s emergency savings fund.

REP. CHAD MCCOY

The crafting of a two-year budget is hands-down the most important thing I am responsible for in Frankfort. In Kentucky, we have so many important and critical programs funded by your hard-earned taxpayer dollars. At the same time, we have incredibly pressing public pension shortfalls that threaten every single program in the state.

I’m proud to report I voted for a bill that, over the biennium, increases the full funding of the Kentucky Retirement System by $774.5 million and the Teachers Retirement System by $89.1 million, to fully fund the ARC at a level never before seen in Kentucky, and for a total of $4.8 billion. Among the major takeaways, the House budget plan ensures health care coverage for retired teachers throughout the next two years, to the tune of $59.5 million in year one. In FY19, in provides $11.8 million and in FY 20, it provides $3.2 million to KTRS to fully fund the teacher match for health benefits. Additionally, it provides $129 million over the next two years to fully fund health insurance accounts for active teachers.

The package, for the first time in history, funds SEEK per pupils at $4,055 in the first year and $4,056 in the second year, to the tune of $60 million each year. Transportation funding for school districts has been restored to current levels with a $127,800,000 investment. And, loan commitments, Nickel Equalization, and funding for the Governor’s Scholar Program and the Adult High School Pilot Program are intact. In total, the two-year House budget package contains a more than $600 million total increase over the Governor’s proposal.

In the House, we took an innovative approach to find funding to fuel top-priorities, and came away with two major components that I believe the vast majority of Kentuckians will support. The first, a 50 cent increase in the cigarette tax, will generate nearly $240 million over the next two years, and the second – a 25 cents per dose opioid tax – will generate an additional $70 million each year. Unlike the consumer-driven cigarette tax, the opioid tax will only affect wholesalers, and not Kentuckians who are prescribed pain-management drugs for serious diseases and ailments.

Funding for the landmark House Bill 1, or the Adoption and Foster Care reform proposal, includes $12.5 million for social workers and $86.2 million over the two years to support an additional 354 positions to support caseloads. Funding for the well-known Family Resource and Youth Services Centers (FRYSC) is included at an increased rate of $185 per child, and kinship care and relative placement are funded by almost $30 million. Additionally, $4.8 million general fund dollars are included for Community Living Programs and also $1.5 million each year for substance abuse programs for pregnant women.

I’m proud to report that the Kentucky State Police took precedent, and will receive funding for 260 cruisers, 800 rifles, and $35.1 million to upgrade antiquated communications systems to new, better-public serving systems. Operation Unite, Kentucky’s substance abuse prevention program, will receive $1.9 million a year to fight one of the nation’s most compelling opioid epidemics. The plan includes funding for anticipated rises in prison population, Department of Juvenile Justice treatment facilities, and monies for the Access to Justice Program. To add new county and commonwealth attorneys, the House package includes $7 million in funding.

Along with our young students in K-12, Kentuckians seeking a higher education will also benefit from this bill. Across the board, the 6.25% cuts to each higher education institutions in Kentucky have been restored in the House package, along with $150 million each year to the University Asset Preservation Pool. KEES Scholarships will receive more than $210 million over the two years, and numerous other programs associated with post-secondary education receive funding shots in the arm.

Veterans were a major consideration for me when I cast my vote. The House budget bill I voted for restores cuts proposed in the Governor’s proposal to the Department of Veterans Affairs, along with restorations in funding for the Commission on Human Rights. Funding is included for Local Government Economic Development and Assistance Funds for Local Communities, for the Agricultural Development Fund, the Early Childhood Development Fund, and the United Prosecutorial System. Additionally, PVA’s are set to receive $2.7 million in the current year to avoid layoffs, and $9.7 million in year two to restore funding to current levels.

And finally, under the House funding package, Kentucky’s debt service ratio is under the target of 6%. This year’s budget contained very hard decisions for me considering the financial pressure we face as a state. Although I am not fond of tax increases, I felt the targeted items we chose will have a very big impact, and allowing funding restoration to important, and some critical, programs.

I expect the House package to be the second step in the process, and the final stop in the Senate will impact changes to the final product. I’m proud to be part of a solution to the issues we face currently, and I’m proud to be part of a solution that produced one of the most efficient and timely budget bills in recent memory.

Please reach out to me with any questions about the two-year budget, such as how it may affect you, or any other legislation. You can reach me through the toll-free message line in Frankfort at 1-800-372-7181, or you can contact me via e-mail at Chad.McCoy@lrc.ky.gov. You can keep track of committee meetings and potential legislation through the Kentucky Legislature Home Page at www.lrc.ky.gov.

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