A new version of the state budget, penned by Kentucky House Democrats, reverses some of Gov. Matt Bevin’s proposed cuts to state spending.
But for the most part, the bill upholds the governor’s proposal for a 9 percent reduction in spending over the next two years and 4.5 percent reduction this year.
The budget passed out of the House Appropriations and Revenue Committee on Tuesday evening.
Notably, the proposal does not include a bond to shore up the state’s ailing pension systems, which has long been a proposal of House Democrats and anathema to Republicans in the Capitol.
The new proposal does alter the central fixture of Bevin’s plan — diverting $500 million from the Public Employees Health Insurance Fund and saving it for the pension systems down the road. Democrats instead proposed skipping the middle man and putting the excess funds directly into the Kentucky Teachers Retirement Systems.
House Speaker Greg Stumbo, a Democrat from Prestonsburg, said the new proposal builds on Bevin’s plan.
“I said all along I thought the governor made a good effort in his attempt to start this process, which he did,” Stumbo said. “We kept the biggest part of that, and I think refined it and moved on.”
Rep. Rick Rand, a Democrat from Bedford, said he didn’t see any reason to wait to fund pensions.
“The pension funds need the money now. The faster we can get money to them, the quicker we can start getting the liability down,” Rand said.
Under the House Democrats’ proposal, many of Bevin’s cuts would stay in place. But the House added to the list of programs exempt or expanded under his budget.
The House budget reverses Bevin’s cuts to higher education, which state university and community college leaders have said would hurt programs at their institutions or else require tuition increases.
Also, Bevin proposed moving universities quickly onto performance-based funding; the House version slows down that plan, instead establishing a working group to come up with a scheme.
In the Department of Education, the House version of the budget restores spending cuts to several programs, such as Family Resource and Youth Service Centers, dropout prevention and after-school services.
The bill would also expand public preschool eligibility from 160 percent of the federal poverty line to 200 percent.
On Tuesday, Republicans voiced tenuous agreement with the proposal, expressing surprise and praise that no pension bonding proposal was included. Rep. Bart Rowland, a Republican from Tompkinsville, said Democrats followed the groundwork laid out by Bevin’s budget.
“I think without the governor coming out the gate with a bold proposal that created a permanent fund, that made the largest effort I’ve seen to fund these pensions, we wouldn’t be where we’re at today,” he said.
Rep. Jim Stewart was the only Republican to vote in favor of the bill; all others voted “pass.”
Rep. Steven Rudy, a Republican from Paducah, said he still needed to read through the bill.
“Looks like something that the minority could probably live with,” Rudy said.
Lawmakers have until midnight on April 13 to approve a budget.
In a statement late Tuesday, Bevin spokeswoman Jessica Ditto called the proposal “encouraging” while slamming House Democrats for introducing it with only a dozen days left in the legislative session.
“We are pleased to see that they clearly got the message from the people of Kentucky who are fed up with mortgaging their children’s future through bonding billions of new debt,” Ditto said.
Ditto went on to criticize the proposal for not including an emergency fund Bevin included in his own budget.