Kentucky Politics

The Kentucky House Appropriations and Revenue Committee presented its vision for the biennial budget on Thursday.

The committee presented bills for funding plans for the executive and legislative branch as well as the committee’s revenue proposal. There was no mention of major spending cuts that have characterized budgets over the past 14 years. 

Committee chairman Steven Rudy, a Republican representative from Paducah, noted that his committee’s budget proposal kept the same debt ratio of 5.3% as the governor’s, but contains some key differences. While both proposals included a 1% raise for all state employees, the governor’s budget proposed a higher raise for teachers that Republicans didn’t include.

The Republican-led House budget proposal would allocate more money for the state’s reserve fund than the governor’s. If enacted, the reserve’s balance would increase to $392.4 million, or 3.3% of general fund receipts, by the end of the 2022 fiscal year. 

The fund was about 2.6% at the beginning of the current fiscal year. 

Other changes to the governor’s budget proposal include:

  • Hiring 50 new social workers in the Cabinet for Health and Family Services, fewer than Beshear’s recommendation of 350.
  • Killing the $34 million in general fund support the governor intended for Kentucky WIRED/ the Kentucky Communications Network Authority.
  • Funding portions of Senate Bill 1, the school safety bill that lawmakers passed last year, including funds to hire 400 guidance counselors. 

The budget includes all the required contributions to state retirement systems.

Committee chairman Rudy said it’s important the legislature completes a budget proposal by April 1 so Republicans can override a potential gubernatorial veto. 

“I think it’s very important that we do not lose sight of the fact that we, the legislative branch, are the policy setters of this commonwealth,” said Rudy.

Jason Bailey, the executive director of the Kentucky Center for Economic Policy, said the similarity between the governor’s budget and the Republican-led legislature’s reflects the fiscal reality of the state. “There’s just not a lot of room to maneuver here,” Bailey said.

“What we’re doing is flatlining most things, and that just continues to erode (the funding levels) with inflation.”

Bailey said the legislature’s refusal to generate new revenue leads to a budget that maintains funding levels rather than investing in programs as other states have been.

The committee also presented proposals for the commonwealth’s revenue plan and the budget for the legislative branch. The revenue proposal did not include any of the governor’s new sources of $148 million in new tax revenue, such as legalized sports gambling. Proposals to tax vaping and other tobacco products were included in other legislation passed by the House.

The proposed legislative branch budget includes a 1% raise for all Legislative Research Commission staff. Funds were transferred from the Legislature retirement plan to the state police retirement plan.