House budget includes record education funding, fully funded pensions
By CHAD MCCOY
50th District State Representative
Friday, March 6, 2020 — While we consider many bills and resolutions during a legislative session, the one task we are constitutionally obligated to accomplish is passing a budget. I am pleased to report that we are one step closer to that goal as I joined my colleagues in voting for the two-year, $23 billion spending plan for our state. Members of the House budget subcommittees have worked countless hours and held many meetings over the past few months, all with the goal of crafting a responsible spending plan that not only meets today’s needs but helps prepare us for tomorrow’s opportunities.
Our goal with this budget is simple – do the most we can with the resources we have while being smart in how we raise new revenue. To use a well-worn phrase, no state has ever taxed its way to prosperity. That is why tax policies passed by the House are aimed at broadening the base in order to lower individual taxes. I have long believed that our state has a spending problem. Without a doubt, we have many needs, but the House version of the budget balances those needs with a responsibility to the men and women who get up every day, go to work, and pay taxes. Every dollar spent is an investment in moving our state forward.
The House budget includes a record level of funding for education, including an increase in the per-student allocation sent to schools (SEEK), monies to implement the school safety act, and an increased investment in postsecondary education. The bill also includes a debt service ratio of 5.3 percent and a Budget Reserve Trust Fund ending balance of $392.4 million. This fund is basically a savings account we often refer to as the “rainy day fund.”
EDUCATION FUNDING. The House budget proposal includes a record level of per-student education funding, with $4,061 in the first year and $4,112 in the second year of the budget. All certified and classified school district staff will receive a one percent salary increase, paid through SEEK funds. Education funding also includes $1.13 billion over the biennium to fully fund the Teacher’s Retirement System’s actuarial required contribution (ARC). An additional $61.7 million is committed in the first year to cover health insurance premiums for those who retired after 2010.
POSTSECONDARY EDUCATION. The House proposal includes $26 million in additional funding for our postsecondary institutions, $16 million of which will be invested through the Performance Based Funding Mechanism. Performance-Based Funding has proven to be an effective method of ensuring that higher education institutions continue to focus on educating students for successful career paths.
SCHOOL SAFETY FUNDING. This budget includes the first step in funding the school safety programs called for by the School Safety Act we passed last session. The measure adds $18.7 million over the biennium to fund facility changes needed to implement the requirements of SB 1, as well as an additional $2.9 million transfer from Restricted Funds in the first year of the budget. The House also included $48.75 million to help school districts hire new guidance counselors to meet the goals of the School Safety Act.
SOCIAL WORKERS. Like many states, we have a critical need for social workers in order to ensure the safety and well-being of children and others placed under state care or oversight. Our budget creates one hundred new positions, but also a five percent raise to retain those who already work for us.
GENERAL GOVERNMENT. All state employees will receive a one percent annual increase in wages in both fiscal years, including constitutional officers. The House budget also provides restricted funds support of $4.8 million for vacant nursing positions in the Kentucky Department of Veterans Affairs. The proposal also increases support for the Local Government Economic Development fund from zero percent to 70 percent of coal receipts, which equals approximately $23 million.
PUBLIC PENSIONS. The House budget proposal fully funds the state’s pension contributions in both fiscal years. For the second budget in a row, legislators are not contributing to the legislative retirement plan. The state’s public pension crisis has left us with a more than $44 billion liability and, frankly, that will take a long time to pay.
DEBT SERVICE, BUDGET RESERVE TRUST FUND. The budget proposal approved by the House Appropriations and Revenue Committee includes a debt service ratio of 5.3 percent. Also, the ending balance of the Budget Reserve Trust Fund will be $392.4 million, more than $76 million more than the original proposal issued by the Governor in January.
In addition to the executive branch, or general government, budget, we also approved the legislative branch budget and the revenue component to the spending plan. All of these bills now go to the Senate for their consideration. I expect that we will have a final product to send to the Governor by April 1 in order to ensure adequate time for review and, if necessary, to override any vetoes he might issue on the document.
Thank you for taking the time to read this week’s update. I appreciate that our paper is willing to run these columns and, of course, hope you’ll let me know if you have any comments or questions. I can be reached during the week from 8:30 a.m. until 4:30 p.m. (EST) through the toll-free message line at 1-800-372-7181. You can also 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 legislature.ky.gov.
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