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House budget committee passes state budget, revenue bill

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FRANKFORT--The House budget committee gave its approval Tuesday to a nearly $20.3 billion two-year state budget proposal that would trim funding for most of state government, leave some areas untouched, and offer modest increases for foster parents and private child care providers.
Most of the spending in House Bill 235, sponsored by House Appropriations and Revenue Committee Chairman Rick Rand, D-Bedford, closely mirrors the budget proposed by the Governor in January. Like that budget, the House proposal would ensure an additional $189 million in guaranteed base per pupil funding (or SEEK funds) for schools, protect Medicaid, and provide nearly $1 billion in new General Fund-supported debt for capital construction while fully funding required contributions to the state’s pension system. HB 235 also would expand preschool for over 5,000 more four-year-olds, and increase funding school textbooks, though at levels lower than originally proposed in the governor’s spending plan.
The House also proposes five percent cuts across most of state government —leading to cumulative cuts of 41.5 percent for some agencies since 2008—with lesser cuts of 2.5 percent for the universities and the Kentucky Community and Technical College System and the Kentucky State Police. At the same time, teachers and state employees would receive pay raises over the biennium with higher amounts given to lower-paid state workers in 2015.
Yet while the House’s proposal is similar to the Governor’s, it is not identical.
The House proposal would include nearly $30 million over the biennium for the Kentucky Pride environmental program, spend nearly $32 million in General Funds to restore the state’s PVAs to base level funding without reliance on new fees, appropriate $1.2 million to hire more 15 social workers for the Department of Public Advocacy, and boost private child care provider rates by $6 million over the next two years, among other provisions.
 The additional General Fund dollars for HB 235 would come from a separate revenue bill, HB 445, which is also sponsored by Rand and was both amended and approved by the budget committee. That bill would add $23.4 million to the General Fund, $60.8 million to the state Road Fund, and $4.5 million in restricted funds through specific revenue measures.
The debt capacity ratio, which basically indicates the state’s ability to borrow, under HB 235 would be the same as proposed by the Governor. The amount of new debt proposed by the Governor over the next biennium is around $1.9 billion.
The state’s rainy day fund, officially called the Budget Reserve Trust Fund, would not be tapped under HB 235. Instead, HB 235 would add around $1.5 million to the trust fund, bringing the fund total to around $99.5 million.
The House budget committee also approved the nearly $840 million two-year Judicial Branch budget found in HB 238 and nearly $117 million Legislative Branch budget found in HB 253. Those budgets also include five percent operational cuts as required for the Executive Branch in HB 235.
All four bills now go to the House for further action.