As Kentucky faces surging pension, prison and Medicaid costs, Gov. Andy Beshear’s administration encouraged Republican budget writers to follow its lead on a new two-year spending plan on Tuesday.
But Republicans have veto-proof majorities in the state House and Senate and won’t have to listen to the Democratic administration if they don’t want to.
Legislators are gathered in Frankfort until mid-April to put together Kentucky’s biennial budget — a difficult task as state economists predict weak revenue growth amid growing demands.
Mary Noble, secretary of Beshear’s Justice and Public Protection Cabinet, called on lawmakers to reform the state’s criminal justice system to save money and reduce the prison population.
“These goals of corrections cost money. And at some point we have to look at it and say, are we spending more money to punish than we are doing anything else? It’s a theoretical question, but it’s one that’s really important to answer,” Noble told the House Budget Review Subcommittee on Justice, Public Safety, and Judiciary.
There are now 24,566 people in Kentucky’s prison system, a 40 percent rise since 2004. Meanwhile Kentucky has lost more than 1,200 medium-security prison beds since 2016, forcing the state to house inmates in county jails.
The Beshear administration predicts the state will spend an additional $115 million on corrections costs over the next two years if no changes are made.
The legislature has considered criminal justice reform proposals in recent years, but the measures haven’t made it very far amid opposition from prosecutors and judges.
This year, the legislature is poised to consider a handful of measures to reform the state’s cash bail system, raise the threshold of what counts as felony theft and change the persistent felony offender policy, which creates longer prison sentences.
Along with the budget, lawmakers will also have to pass a new two-year revenue plan — laying out how the state’s tax system will look.
John Hicks, Beshear’s budget director, criticized the last tax plan the legislature passed into law in 2018, saying it relied on an unreliable revenue source — an increase on the cigarette tax.
“It drains away some of the resources associated with what was a net tax increase,” Hicks told members of the Senate Appropriations and Revenue Committee. “This is one reason the growth rates are down. It’s not an economic reason, it’s a fiscal policy reason.”
Lawmakers passed a combination of tax cuts and increases in 2018, raising the sales tax on 17 previously-exempted categories like pet grooming and car maintenance, but lowering the individual and corporate income taxes for top earners.
Beshear has proposed a combination of revenue-increasing measures to fund his budget proposal — a 10 cent increase to the cigarette tax, legalizing sports betting and increasing the fee for limited liability companies.
Among other proposals, Beshear wants the increased revenue to go towards a budget that would provide $2,000 raises to public school teachers, some increases in funding for K-12 and higher education and adds 350 new social workers.
But the legislature will be in the driver’s seat. House Appropriations and Revenue Chair Steve Rudy, a Republican from Paducah, said “chances are” that the final version of the budget will likely look greatly different from Beshear’s.
“It’s the process. We the General Assembly are the policy makers and we will appropriate the funds as we see fit,” Rudy said.