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Ky. Lawmakers Pass Tax-Credit Scholarship Bill, Teacher Pension Reform

Thomas Galvez/Creative Commons
Thomas Galvez/Creative Commons
Thomas Galvez/Creative Commons

Kentucky state lawmakers passed several bills that would bring big changes to K-12 education Tuesday, including a teacher pension reform measure and a controversial tax-credit scholarship program.

Tuesday was the last day of the Kentucky General Assembly’s legislative session before the veto period, and lawmakers passed a flurry of bills before the midnight deadline. This gives them an opportunity to override any vetoes from Gov. Andy Beshear when they return for the last two days of the session at the end of the month. 

Updated 11:52 p.m. 

Teacher Pension Reform Bill Clears Both Chambers, Heads To Governor

A bill creating a new pension program for new teachers has cleared both chambers and is on its way to Gov. Andy Beshear. If Beshear vetoes the measure, the chambers each have enough votes to override.

The measure, HB 258, creates a new, less-expensive “tier” for teachers hired after Jan. 1, 2022. New teachers would have a smaller defined benefit than current teachers, but also have an additional defined contribution plan. While current teachers can retire at age 50 with 30 years, new hires would have to wait until age 57. 

Supporters of the measure say it’s needed to address the existing pension program’s unfunded liability. 

“We tried to make sure that this plan would be sound, it would stay funded, and that new hires would be assured it would stay funded,” Boone County Republican Rep. Ed Massey said. 

Meanwhile many House Democrats voted against the bill, saying it shifts the risk onto teachers, whose benefits would fluctuate based on the treasury rate, and reduces benefits.

“This is something we can't afford to do to our teachers,” Jefferson County Democrat Joni Jenkins said. “We're going to lose teachers, we're going to lose people from going into the profession.”

The measure passed 63-34.

Updated 11:15 p.m.

By A Hair, State Lawmakers Pass Tax-Credit Scholarship Bill

In a 48-47 final vote, the Kentucky House passed a controversial bill that would create a tax-credit scholarship program, sending the measure to the desk of Gov. Andy Beshear. The governor has spoken out strongly against the bill, and will almost certainly veto it.

The measure would allow individuals and corporations to donate to a scholarship fund, rather than pay state taxes. The fund is capped at $25 million. Taxpayers can donate up to $1,000,000 each, and would receive a tax-credit of up to 97%.

Low and middle-income families would then apply to use the scholarship funds for educational expenses. In the state’s eight most populous counties, they could use the funds for private school tuition.

Those counties are:









As the measure squeaked through, it gained a Democratic vote from Jefferson County Rep. Al Gentry, who broke with his party.

Gentry said he felt he had to support the bill, as he represents a “high Catholic suburb,” where “lesser-income” parishioners want access to the funds for Catholic school tuition. Catholic schools stand to receive millions if the measure becomes law.

Meanwhile many others in his party railed against the measure, calling it an attack on public education.

Jefferson County Democratic Rep. Pamela Stevenson asked why not spend the $25 million on textbooks or transportation or facilities for public schools, which have been grappling with declining state revenues per student.

“It's like my three-year-old niece says when we're playing peekaboo: ‘I see you.’ And the public sees us. Our actions don't show that we care about kids,” she said.

The measure passed by a single vote after proponents used a procedural measure to cut off debate.

The House needs a 51-vote constitutional majority to override Beshear’s looming veto. That means supporters need to pick up an additional three votes for the measure to become law.

Updated 9:04 p.m.

Lawmakers Reach Agreement Preserving Student & Teacher Seats On Board of Ed

Republican Sen. Mike Wilson says the House and Senate have come to an agreement on HB 178, which reorganizes the state board of education. Wilson told the Senate the agreement preserves the nonvoting student and teacher members. However the student member would be selected by the Kentucky Department of Education, and not the governor. The student would serve a one-year term, instead of the current two-year term. And the student would come from a different congressional district each year, rotating around the state.

The Senate passed the measure 30-3.

Updated 8:27 p.m.

Senate Passes Tax-Credit Scholarship Bill

The controversial $25 million tax-credit scholarship bill cleared the Senate in a 21-15 vote. The measure goes back to the House for its approval of two major changes: the Senate version expands the counties where parents can use the funds for private schools to those with at least 90,000 residents. And the Senate removed the provision funding full-day kindergarten, a measure House proponents of the bill added to garner more support.

During more than an hour of debate in the Senate, Republican supporters of the measure touted its potential to help low-income students access private school education.

“This bill is meant to help level the playing field and provide for the same options as the wealthy,” said Sen. Ralph Alvarado, a longtime champion of efforts to privatize public education, such as the tax-credit program, and charter schools.

But several Senate Democrats said they see the tax-credit scholarship program as an attempt to erode public education by diverting millions of dollars from struggling public schools to private ones.

“This bill is the beginning of the end of public education here in Kentucky,” Lexington Democratic Sen. Reginald Thomas said. 

Thomas, along with Jefferson County Democratic Sen. Morgan McGarvey, worry the lowest-income students would not benefit from the funds, since low-income parents often do not have the time and resources to apply for scholarships.

Some Republican senators voted against the bill because it would not allow students in their rural counties access to the funds.

According to a recent federal report, tax-credit scholarship programs exist in 17 states, the largest being a $623 million program in Florida. 

Many states have some accountability and oversight built into their programs, including requirements that private schools be accredited, that they test students to determine how well they are learning, or requirements that prevent discrimination based on gender, sexual identiy, religion or race. 

The program under HB 563 has no such requirements.

Updated at 6:40 p.m.

House Passes School Year ‘Do-Over’ Bill

Students will be allowed to request a chance to redo the 2020-2021 school year under a bill that passed the state House. The measure, SB 128, would allow parents of students in grades K-12 to request to use the next school year as a “supplemental school year” to retake or supplement courses already taken. High school students would also remain eligible for a fifth year of athletics, as long as they meet the age requirements set by the Kentucky High School Athletic Association (KHSAA).

It would be up to individual districts to design their supplemental school year, and whether to grant students’ requests. Districts could only accept all requests, or none.

The state would provide funding for the extra students this would create for districts to educate. Lawmakers estimate it will cost an additional $6 million, which they say has been budgeted.

The measure goes back to the Senate for final passage.

Teacher Pension Reform Bill Clears Senate

A bill adding second tier for new hires to the Kentucky Teachers Retirement System passed the Senate 25-11. Under the bill, teachers hired after Jan. 1, 2022, would have a “hybrid” retirement plan, with both a defined benefit plan and a defined contribution plan.

Republican lawmakers say pension reform is necessary to address the massive unfunded liability in the existing pension system. That liability has grown due to several years during and after the Great Recession, in which lawmakers made the minimum payment required by statute, not the amount actuaries say is needed.

“What this new plan does, is it stops the digging. This new plan is designed to prevent Kentucky from ever having another unfunded liability in a pension plan,” Marion County Republican Sen. Jimmy Higdon said.

Though the estimated salary replacements for the proposed plan are comparable to what current teachers receive, new teachers would have to pay in more and work longer to receive their benefits.

“I think what this bill does is really discourage people from going into education, by reducing their benefits,” said Lexington Democratic Sen. Reginald Thomas, who voted against the bill.

The measure now goes back to the House for its signoff on changes made by the Senate. Senators raised the proposed retirement age for new hires from 55 to 57 years old.

Senate Stands Behind Move To Remove Teacher And Student From Ky. Board Of Education

The Senate voted not to recede from its changes to HB 178, which reorganizes the state board of education. The chambers are now at odds over a Senate provision that removes the nonvoting student and teacher members from the board. Members from each chamber will be appointed to a free conference committee that will meet this afternoon to see if they can come to agreement.

House Rejects Senate’s Proposal To Remove Teacher And Student From Ky. Board Of Education

The House rejected by a wide margin the Senate’s changes to a bill reorganizing the Kentucky Board of Education, which would have removed the board’s nonvoting student and teacher members.

Both Republicans and Democrats criticized the Senate’s decision to remove those positions, which were created by Beshear. He added a Rowan County special education teacher Allison Slone when he reorganized the board upon taking office in 2019. He added the student member, Eastern High School junior Solyana Mesfin, in October 2020.

“I'm just bewildered as to why the other chamber decided that it wasn't a good idea to have a teacher and a student on the board of education, particularly since they're nonvoting positions,” Jefferson County Democratic Rep. Tina Bojanowski said.

“If we had an agriculture board without a farmer on it, if we had a police board without a policeman on it, if we had a bar association without an attorney on it, it wouldn't float,” Lexington Republican Rep. Killian Timoney said.

Other provisions in the bill would remove the governor’s power to reorganize the board of education, and would require the governor to appoint members of both major political parties. The bill would also require equal numbers of men and women on the board, and require racial minority representation proportionate to the total racial minority population of the state.

The bill heads back to the Senate for now.

Tax Credit Scholarship Bill On The Move, With Senate Changes

A House bill that would create a controversial $25 million tax-credit scholarship program got the green light from a Senate committee, but with some important changes. 

The version that squeaked through the House last week would allow parents to use the scholarship funds to pay for private school tuition, but only in counties with more than 150,000 people. That would be Fayette, Jefferson and Kenton counties. The House also included a provision funding full-day kindergarten across the state.

The new version passed by the Senate Appropriations and Revenue committee on Tuesday would allow parents in counties with 90,000 residents or more to use the funds for private school tuition, and removes the full-day kindergarten funding. If passed, both provisions would be considered losses by public school advocates.

Tax-credit scholarship programs are in at least 17 states, and are popular with supporters of privatizing K-12 education. Kentucky’s program would allow individuals and corporations to receive tax credits of up to 97% for their donations to a scholarship fund. Low- and middle-income families could apply for funds to use for educational expenses, such as school fees, textbooks and tutoring, and, in some counties, private school tuition.

The program is controversial because some say it diverts funding from cash-strapped public schools to private ones.

Ryland Barton contributed to this reporting.

Jess Clark is LPMs Education and Learning Reporter. Email Jess at jclark@lpm.org.