April 1, 2014
FRANKFORT—The Kentucky General Assembly today approved a two-year spending plan that authorizes $20.3 billion in spending for education, public safety, Medicaid, and other state government services while cutting spending in many state agencies by 5 percent through fiscal year 2016.
House Bill 235, sponsored by House Appropriations and Revenue Committee Chairman Rick Rand, D-Bedford, was granted final passage by a vote of 89-11 in the House. It had passed the Senate by a vote of 37-1 earlier in the day. The bill now goes to the governor to be signed into law.
Senate Appropriations and Revenue Committee Chairman Bob Leeper, I-Paducah, called the agreement a “budget that, I believe, sets us on a good stead for the future.”
“It makes me feel good about what you all will face in the next biennium,” Leeper said.
“We did what you paid us to do,” House Speaker Greg Stumbo, D-Prestonsburg, said of the state budget process. “It was democracy in its purest form, but it worked.”
The Executive Branch budget agreement adds around $189 million in guaranteed base per pupil funding (or SEEK funds) for schools, protects funding for Medicaid, PVAs and prosecutors, and adds $743 million in new General Fund debt and $721 million in new agency bond debt—mostly for postsecondary education. That is less than the nearly $2 billion in new General Fund and agency bond debt proposed by the House and more than the $533 million in new General Fund and agency bond debt proposed by the Senate earlier this month.
HB 235 will also require smaller cuts to postsecondary education than originally proposed. State university budgets will be cut by 1.5 percent rather than 2.5 percent as proposed by the governor, with bond authorizations for many university projects restored. Community and technical college budgets will also be reduced by 1.5 percent instead of 2.5 as earlier proposed, with those institutions’ capital projects paid for with student fees and private donations culled by the colleges.
Also included in the bill are pay raises for state workers of at least 2 percent over the biennium—with the lowest-paid workers receiving higher raises in the first year—and 3 percent raises for teachers of 1 percent in fiscal year 2015 and 2 percent in fiscal year 2016. A total of $3.3 million in 2015 and $6.6 million in 2016 for K-12 education technology are also found in the budget rather than the $50 million bond issue that had been proposed in an earlier budget version.
HB 235 also includes: full funding of the actuarial required contribution (ARC) to Kentucky’s public pension system; funding for expanded preschool for four-year-olds statewide in 2016 totaling $18 million; additional funding to boost foster care rates; and restoration of child care subsidies for low-income families that had been cut from the state budget last year by adding $39 million for the subsidies the first year of the biennium and $58 million in the second year. Families with household incomes of up to 125 percent of the federal poverty level would receive the subsidies under HB 235 in 2015, with subsidies expanded to families making up to 160 percent of the poverty level in 2016.
The House also voted 99-1 for final passage of the amended state Judicial Branch budget, which had passed the Senate unanimously earlier in the day. An amended Legislative Branch budget also passed the Senate unanimously today and also received final passage in the House by a vote of 99-1.
The House voted 91-9 for agreed-upon changes to HB 445, the session “revenue bill” that will provide some new dollars to fund state needs over the biennium. Provisions in that bill include, but are not limited to, a phased-in barrel tax credit for distilled spirits, an angel investor tax credit, an expanded historic preservation tax credit, and “new markets” tax credit to help underserved areas of Kentucky. The revenue measure had passed the Senate by a vote of 35-3 earlier in the day.