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Kentucky Senate Passes Budget

Kevin Bratcher holds papers at desk during committee meeting.
Legislative Research Commission
Rep. Kevin D. Bratcher, R-Louisville, presents House Bill 3, a bill geared toward juvenile justice reform before the House Judiciary Committee.

The Kentucky Senate passed a budget bill on Wednesday that contains most of Gov. Matt Bevin’s nearly across-the-board proposed spending cuts, including deep cuts to higher education.

The Senate budget also aligns closely with Bevin’s proposal to set aside money in the state rainy day fund and a “permanent fund” that Bevin says would be dedicated to shoring up the pension systems in the future.

Senate Appropriations and Revenue Committee chairman Chris McDaniel said the proposal is “structurally balanced.”

“We have to address our current problems in order to be able to invest in our future opportunities,” he said. “There are no one-time moneys used for current expenses.”

Bevin proposed — with a few exceptions — cutting state spending in all departments by 9 percent over the next two years and 4.5 percent for the rest of this fiscal year, which ends on June 30th.

Like the House, the Senate left in most of Bevin’s two-year cuts but removed cuts for the rest of this year.

But while the House restored about $215 million in Bevin's proposed higher education cuts, the Senate left those cuts in.

The state’s funding level for the University of Kentucky will be about the same as it was in 1998.

Sen. Reggie Thomas, a Democrat from Lexington, voted against the bill.

“This budget, in terms of its impact on higher education, will take us back to 1998 and will seriously impact the University of Kentucky and the City of Lexington in terms of its ability to provide quality education,” he said.

The Senate’s budget also includes a provision for 25 percent of funding to state universities to bebased on performance metrics like graduation rates and closing achievement gaps.

Higher education institutions would compete for $204.6 million in funding.

Over the two-year budget period, the Senate version puts an additional $913 million into the teacher pension system — slightly less than the House’s proposal of $1.03 billion and significantly more than Bevin’s $688.3 million.

The Senate sets aside $282 million for Kentucky Retirement Systems — the pension fund for most state employees. That’s more than both the House’s proposal of $89 million and the $157 million in the governor's plan.

Jim Carroll, a spokesman for Kentucky Government Retirees advocacy group, applauded the Senate’s pension model, calling it a “credible funding plan.”

“It recognizes the critical need for substantial payments above the basic employer contribution to avert fiscal disaster,” Carroll said.

The Senate budget authorizes $50 million in bond money that would go to workforce development projects. Bevin wanted $100 million in bonds for the project, the House didn’t fund it at all.

The Senate budget also removes language from the House version that would have sent all revenues from coal severance back to coal counties, leaving it at a split between counties and the state.

Sen. Brandon Smith, a Republican from Hazard, voted against the bill, saying that the budget took money away from coal communities.

“The struggle right now for us is real. And pulling this money from these areas down there is irresponsible,” Smith said.

Like Bevin’s budget, the Senate’s proposal suspends the prevailing wage for any public works construction projects during the biennium.

The Senate also reversed Bevin’s plan to hire 43 new public defenders across the state to help with caseloads.

Lawmakers from both legislative chambers now have one week to hammer out a final version of the budget before they submit the document to Bevin on March 30.

Senate President Robert Stivers said the negotiations with the House won’t be contentious.

“We will work as expeditiously as possible,” he said.

Once he receives the budget, Bevin will have a little over a week to review the document. After that, the legislature has two days to override any vetoes before adjourning on April 12.

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