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Ky. House GOP budget bills clear committee with changes to school transportation, vacancies

Kentucky Rep. Jason Petrie looks at a stack of papers with House Majority Floor Leader Steven Rudy.
Legislative Research Commission
/
LRC Public Information
Republican Rep. Jason Petrie, of Elkton, (left) and House Majority Floor Leader Steven Rudy, of Paducah, look over various proposals for the state’s next biennial budget.

The amended Kentucky House budget fully funds school transportation for the first time in decades, increases per pupil funding, bolsters infrastructure spending and pays into the unfunded liability of the state's public pension system.

A Kentucky House committee advanced several state budget bills in a special meeting Wednesday, clearing their way to pass the full chamber as soon as Thursday.

Together, they detail nearly $29 billion of General Fund spending for state government over the next two fiscal years and $1.7 billion of spending from Kentucky’s budget reserve trust fund.

The Republican chairman of the House Appropriations and Revenue committee first filed the budget bills two weeks ago. They increase the per-pupil SEEK funding formula for public schools, spend an additional $1.5 billion to pay down unfunded liabilities of the public pension system and create thousands of additional Medicaid waiver slots.

The bills that passed Wednesday were amended from their original versions, with paper copies given to committee members the previous evening and that morning. The amended bills had not been posted online for the public to view before they were passed, with Democrats criticizing the GOP supermajority’s lack of transparency.

House Bill 6, a 257-page bill that details executive branch spending over the next two years, was amended to add funding for currently vacant positions the bill previously omitted.

Democratic Gov. Andy Beshear criticized the original bill for defunding roughly 2,700 vacant positions his administration was trying to fill, comparing it to blindly “taking a hatchet and hacking at the executive branch.”

Quickly summarizing the changes in the HB 6 committee substitute, committee chairman Rep. Jason Petire of Elkton said it would “reduce the vacancy credits applied to all agencies and exempt critical need classifications in Corrections, state police, Veterans Affairs and other agencies.”

Beshear had said the original version of HB 6 would have cut $158 million of General Fund spending in each fiscal year by defunding vacant positions, but spokeswoman Crystal Staley said Wednesday it appears “many” of the cuts have been restored in the amended version.

As an example, Staley said the original budget bill “would have cut 257 full-time positions from Corrections and of those 203 had already been filled. Now, the House substitute has restored funding for these critical positions.”

Another HB 6 amendment added $40 million of spending to fully fund the local transportation costs of K-12 public school districts in the 2025-2026 fiscal year. If passed, this would be the first year state government fully funds these costs – which is required under law – in more than two decades.

The governor’s proposed budget had fully funded schools’ transportation costs in both years, whereas the original version of HB 6 funded them by 80% in the first year and 90% in the second.

Unlike the governor’s proposal, HB 6 does not fund universal pre-K or mandatory 11% raises for all K-12 staff statewide, which has a $1.4 billion price tag.

While HB 6 increases the per-pupil SEEK formula for funding K-12 schools by 4% and 2% in the next two fiscal years, school officials around the state have said that’s still insufficient funding to raise teacher salaries enough to attract and retain them.

Democratic Rep. Josie Raymond of Louisville asked Petrie about that criticism, saying "we've had superintendents here at the Capitol this week saying with the small SEEK increases in this budget, they either can't give raises, or maybe it'd be 1%."

Petrie replied that he’s heard the same concerns, but “I don't think they're fully vetted out.”

“We are listening to them to see if there's anything further to do,” Petrie said, adding the budget bill is likely to receive further changes when it reaches the Senate and then comes back to the House for concurrence.

The version of HB 6 passed out of committee retained language that threatened local school districts with “takeover” if they don’t make progress on employee recruitment and retention.

House Bill 6 cleared the committee with the support of all Republicans and no Democrats, with Rep. Cherlynn Stevenson, a member of Democratic leadership from Lexington, taking issue with how little time they had to look over the amended version of the bill.

“I wish we had been able to get those in an electronic format, because it makes comparing what's in there and what isn't in there much easier, rather than having to go through the paper copies,” Stevenson said. “And obviously that makes it harder for us to share with stakeholders, advocates, our constituents, and it kind of further keeps them in the dark and makes our job a little bit harder.”

Another member of House Democratic leadership, Rep. Rachel Roberts of Newport, made a motion earlier in the day on the House floor that would have allowed floor amendments to the amended HB 6 if it is brought up for a final vote in the chamber on Thursday. It was defeated in a party-line vote, with Roberts saying that “sanctimony reigns here and democracy dies on this House floor.”

House Bill 1 had originally directed $1.7 billion from the budget reserve trust fund to be spent on a mix of infrastructure projects and paying down the unfunded liability of Kentucky’s public pension system. The amended version passed Wednesday has only one change — an additional $100 million to support potential large-scale economic development projects.

Kentucky’s budget reserve — often called a “rainy day fund” — is currently at $3.7 billion, a state record.

The $950 million included in HB 1 to pay down public pension liabilities does not count towards General Fund spending in Kentucky’s trigger mechanism for individual income tax cuts. The additional $900 million of infrastructure spending would normally be subject to the trigger mechanism, but HB 1 retained “notwithstanding” language to exempt this spending, improving the chances that tax cuts would be lowered in the next biennium.

Asked by Raymond if the budget was crafted in a way to improve the odds of tax cut triggers being hit in future years, Petrie again answered that it was not.

After HB 1 was passed in the committee, Petrie told reporters “it’ll be close” on whether Kentucky hits the tax cut triggers in July 2025, unless the state experiences more natural disasters necessitating emergency spending. However, he said hitting the triggers the following year will be much more difficult with increased Medicaid and education costs.

The committee also passed House Bill 264 and House Bill 263 to fund the judicial branch and legislative branch over the biennium. They also passed House Joint Resolution 56 to release $62 million of capital construction funds for renovations at state parks.

LPM's state government and politics reporting is supported in part by the Corporation for Public Broadcasting.

Joe is the enterprise statehouse reporter for Kentucky Public Radio, a collaboration including Louisville Public Media, WEKU-Richmond, WKU Public Radio and WKMS-Murray. Email Joe at jsonka@lpm.org.