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In the final full week of legislative session, we continued to hash out state budget details with the House in conference committee after passing our versions of the budget bills. Conference committees include the Executive, Judicial, and Legislative Budgets for the next two years, as well as the state’s road plan. There are many different opinions and philosophies on how to spend the money, raise revenue, and support the important public services for Kentucky. The budget is the ultimate statement of priorities for the Commonwealth.
As for us, we worked seven days, many late into the night, to make our changes to the House’s budget bill so that they could review our changes and act upon it. Our priorities include creating a budget of austerity, fiscal responsibility, and fulfillment of our obligation to provide the necessary services while respecting the taxpayers of Kentucky.
Our major adjustments to the House’s budget bill were actions that reduced our borrowing, reduced the bonding and generally used money more efficiently and wisely. We lowered the debt service ratio (that is the percent of current revenue we direct to paying debt payments) from 7.05 percent in the House to 6.26 percent. Also, we increased the budget reserve trust fund to $125 million. We also reduced the structural imbalance (the amount by which current spending is more than recurring revenue) from the proposed $231 million to $153 million. Regarding the road plan, we took out the 1.5 cent gas tax increase that the House proposed.
Education is a key piece of our budget, and always high on the list of priorities. The House’s budget had appropriated $50 million in school technology bonds to fund devices for schools. This means that Kentucky would pay ten years on equipment that had an average life of three to four years. We did not agree with this method, however, we know updated technology is essential for our students and classrooms. So, the Senate lead the effort of finding a better way to fund this initiative while reducing our spending. We can provide the equipment, expand the bandwidth for classrooms, and implement a statewide Information Technology Academy program with an investment of $6.6 million. This plan uses a federal E-rate program that will pay for 80 percent of the bandwidth investment and also can be used for devices for classrooms.
Another big ticket item is healthcare. This year, as the Affordable Care Act was implemented, the state’s obligations to provide healthcare to uninsured people changed. Under our budget plan, no state funds can be used for the ACA because the federal government is committed to its funding. If those commitments change, we can opt out of both the exchange and the expanded Medicaid. We also redirected the funds of the Quality and Charity Care Trust for University of Louisville. ACA is the ultimate social net, and if it is working as proponents claim, the additional money is not necessary and can be spent in another area of need.
Though we had differences of borrowing limits and indebtedness, there were several aspects of the House’s budget with which we concurred. We agreed to fully fund the actuarially required contribution of both the Kentucky Employees Retirement System and the Kentucky State Police Retirement System.
We also agreed with the raises for State employees for 2015 and 2016.
The budget bill is an all encompassing document that cannot be explained in a few paragraphs but these are the high points. I do want to point out another major savings we wrote into the budget: to authorize $270 million in agency bonds as opposed to the House’s proposed $974 million.
Work has begun in conference committee, and changes will continue to be made, but we will work hard to preserve fiscal accountability which our constituents deserve.
Additionally, we came up with a plan during conference committee for school districts regarding the unusual amount of snow days. The official last day of school will be June 6, however, districts will have the option to be in session longer if they feel it is needed. Districts will supply a plan on making up the hours missed to the Department of Education by May 1. For districts that are unable to reach the 1,062 hours, the commissioner of the KDE will have the authority to waive remaining hours.
Other than these budget measures, Senate Bills that we passed included Senate Bill 211, which gives persistently low-achieving schools the option to convert to charter schools to increase their performance.
I invite you to come to Frankfort for hearings of interest to you. Citizens are always welcome in our committee meetings. You can also view live-streaming and archived coverage of legislative proceedings at www.ket.org. Also, the work of our caucus can be followed on twitter at @kysenategop.
If you have any issues or concerns, please call my office in Frankfort at 502-564-8100. I appreciate your time and input.
Senator Paul Hornback (R-Shelbyville) represents the 20th District including Carroll, Henry, Shelby and Trimble Counties, as well as part of Jefferson County.