The Brent Spence Bridge project, the Gateway Community & Technical College urban metro campus in Downtown Covington, and a new health innovation center at Northern Kentucky University were all name-checked in Governor Steve Beshear's budget address Tuesday.
Beshear announced his biennial budget priorities before the General Assembly in Frankfort.
The top priority was more money for education in Kentucky, a move that will require cuts from other agencies.
The address followed his State of the Commonwealth speech two weeks prior.
"Two weeks ago, I stood here and signaled my intent in clear and decisive words: I am determined to find money to reinvest in education, I said then, even if I have to make harmful cuts in other areas to do so," Beshear said. "Well, that's precisely what this two-year budget proposal does: It makes damaging cuts in many areas in order to keep Kentucky at the forefront of educational attainment in this nation.
Details on those plans follow below.
While a long-south after health innovation center at NKU was endorsed by the governor, Beshear also said there would be cuts to higher education.
"My proposal includes both good news and bad news," Beshear said. "It exempts student financial aid from the five-percent cuts, but it reduces operating funds for our universities and our two-year community and technical college system, although it holds that reduction to 2.5 percent."
"Look, I am painfully aware that with this reduction, our colleges and universities will have undergone cumulative cuts of seventeen percent during this historic recession. This was one of the most difficult choices made in this budget, because higher education deserves more support, not less.But there simply is no way to create enough money to make the needed investments in pre-K through Twelfth grade unless higher education is included in the reductions."
On the bright side, Beshear announced that General Fund-supported bonds would allow for the investment of more than $520 million in capital construction projects for each four-year public university in Kentucky, including NKU's health innovation building.
General fund-supported bonds would offer NKU $97 million to build its health innovation center and renovate its old science building. An additional $15 million would be available to expand a parking garage through agency bonds.
Additionally, Beshear's agency bond plan, which he announced could help other state universities' with select projects, includes what he called an historic proposal that represents the single-largest investment in the Kentucky Community & Technical College System (KCTCS), which includes Gateway, since its formation.
"(KCTCS) leadership came to me with a proposal to be allowed to use agency bonds for the first time every to fund up to seventy-five percent of the cost of sixteen critical projects," the governor said. One of those projects mentioned is the $80 million planned urban metro campus in Downtown Covington for Gateway. The plan would allow for work on one select project at each campus.
"At least twenty-five percent of the remaining cost will come from the local communities and other public or private sources. This is a perfect example of the public and private sectors working in concert, and it builds on the close connection between these institutions and the business communities whose workers they groom," Beshear said.
"And the leaders of the system assure me that debt service will not add to the cost of an education in any meaningful way."
Expanded gaming, tax reform
The Governor acknowledged that he could have simply slashed the budget across the board, but instead, he chose to make damaging cuts to some areas in order to make strategic investments in education. He pointed to tax reform and gaming as two alternatives that would allow much more progress and more investment with far less damage to needed services.
The Governor will present a tax modernization proposal to legislators soon, which will offer specific recommendations on how to move the Commonwealth’s antiquated tax system into the 21st century and make the state more competitive.
“One of the silver linings of a more competitive tax structure is that it will, as the economy grows, also stabilize long-term revenue – not because of higher rates, but because it's aligned with today's economy, instead of one that existed a century ago,” said Gov. Beshear.
Expanding gaming would produce additional recurring revenue even faster – again, not by creating a new burden on Kentuckians but by capturing a revenue stream that already exists.
“Kentuckians are currently spending hundreds of millions of entertainment dollars on gaming – but they’re spending it in other states, funding programs outside our borders,” said the Governor. “Let’s allow Kentuckians to decide this issue by placing a Constitutional Amendment on the ballot related to expanded gaming.”
He concluded his remarks by reminding the legislators of their recent successes attained by working across party lines – everything from robust prescription drug laws to pension reform.
“I believe that with the same level of respect, collaboration and vision, we can direct the resources of this budget to help Kentucky maintain its position as an innovative force in this 21st century world,” he said. “Now, let’s get to work.”
Education funding, restoring cuts to child care
The Governor’s proposed budget's largest investments are in K-12 education. The largest item is SEEK, the main funding formula for our classrooms. From 2000 to 2008, SEEK grew an average of 3.4 percent each year. But from 2008 to 2014, funding flatlined – even as enrollment expanded, costs increased and local support in some areas declined. In effect, per-pupil spending dropped, even though the annual SEEK allocation remained the same.
Governor Beshear recommends investing $189 million over the biennium into SEEK, bringing per pupil spending to its highest total ever.
That allocation will include pay increases for all teachers and classified school personnel (2 percent the first year, 1 percent the second year).
Gov. Beshear’s proposed education investments also include:
· $95.4 million over the biennium for textbooks, professional development, school safety and Extended School Services(restoring funds to near-2008 levels)
· $36 million over the biennium to expand preschool services to serve 5,125 more 4-year-olds by increasing eligibility from 150 percent of the poverty level to 160 percent. This is a 22 percent increase in enrollment.
· $50 million for technology and school equipment upgrades, funded through General Fund-supported bonds
· $100 million for school facilities construction to replace aging K-12 school buildings through General Fund-supported bonds
Restoring Child Care Assistance Cuts
Last year, the loss of federal funds forced the state to freeze applications to the Child Care Assistance Program and to reduce eligibility guidelines from 150 percent of the poverty level to 100 percent. As a result, many parents who could no longer afford child care had to quit their jobs, and many child care centers which relied on those payments had to close their doors. Gov. Beshear’s budget restores the funding cut from that vital program. This action will impact 18,000 children and more than 10,000 families.
Read the highlights of the address: Click Here
Read the full proposed budget: Click Here (PDF)
Photo: Gov. Beshear just before giving his budget address/via Twitter