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Legislature Approves Second Half of State's Two-Year Budget

The Kentucky General Assembly approved the second half of the state’s 24-month spending plan Monday after uncertainties from COVID-19 cut budget negotiation short nearly a year ago.

House Appropriations & Revenue Chair Jason Petrie (R-Elkton) described the $12 billion budget as a near continuation budget from the previous fiscal year with necessary modifications.

“Our economy has certain structural signs of strength, but we’ve also had a lot of federal money infused into our economy, which makes analysis of the economy data, difficult at best,” he said. “We remain hopeful that things will get better, but we’re still not certain.”

With the economy in mind, Petrie said HB 192 would open up more funds for roads and the state’s reserve trust fund. With $958 million in the reserve trust fund, that would give the state 29 days in emergency funds instead of 10 to 14, Petrie added.

Senate President Robert Stivers (R-Manchester) said HB 192 would not budget the billions of dollars in federal COVID-19 relief money from the American Rescue Plan. The bill does contain language stating the stimulus money cannot be expended without the “express consent” of the General Assembly.

Stivers said the federal government hasn’t released “guidance” on exactly how it can be spent. The stimulus package was signed into law on March 11, well into the eleventh hour of state budget negotiations. While Kentucky is expected to receive $2.4 billion from the latest stimulus package, Stivers explained the actual amount could be much more. He said other federal money would go directly to cities, counties and school districts.

“In the aggregate, close to $6 billion will be spent in this state in the next 14 months,” Stivers said. He added that HB 192 was a flat-line budget with lots of reserve cash because he would prefer to spend those federal dollars, when the guidance is released, rather than state tax money.

Stivers said the one-time infusion of cash could be used in revolutionary ways such as creating a research pool for universities to access. He said similar research funds were successful in Pittsburgh, Boston and Raleigh, N.C.

“We need to pass this,” Stivers said of HB 192. “Then, we really need to sit down and start the real work of what we need to do and shoot for the moon. If we miss, we will still be in the stars.”

Critics of the state budget said they would have liked to see the budget increase access to clean water and the internet in addition to school funding and COVID-19 relief for small businesses.

Rep. Cherlynn Stevenson (D-Lexington) said she felt it was time for the General Assembly to take “bold action” and create a “forward-thinking” budget, but instead she found the budget was “simply disappointing.”

“Kentucky families need our help right now more than ever,” she said. “Small businesses need our help right now more than ever. Nonprofits need our help more than ever.”

Sen. Phillip Wheeler (R-Pikeville) said he strongly supported HB 192 because it would return coal severance money, or the tax revenue from mining coal, back to coal-producing counties at record percentages.

Petrie said the budget also would include relief for long term care facilities, address unemployment and recruiting of state troopers.

Other appropriations in the 2021-22 fiscal year executive branch budget would include:

·$1.7 million for Bluegrass Station Airport and Air Park in Lexington;

·$4.1 million in federal funds for pandemic related-relief programs;

·$500,000 to address security concerns for the Attorney General;

·and full funding of the actuarial required contributions for the Kentucky Teachers’ Retirement System and Kentucky Employees Retirement System.

Sen. Whitney Westerfield (R-Crofton) said he voted for HB 192 but wished lawmakers would adopt rules to force them to take up budgets earlier in sessions. The General Assembly has met 27 of the 30 days constitutionally allowed for regular sessions in odd-numbered years. Those sessions also cannot extend beyond March 30.

“There are a lot of things in this budget I can get behind and really support,” Westerfield said. “There are a lot of things I’m not particularly crazy about. Some of that is because we do not have enough resources and some of it comes down to whether I would prioritize the same way others would.”

HB 192 passed the Senate 30-0-6 before being passed in the House of Representatives by a 74-23 vote.

The General Assembly also passed the legislative branch budget, contained in House Bill 194, and the judicial branch budget, contained in House Bill 195.

All these bills now go to the governor who has 10 days, excluding Sundays, to sign the measure or veto any items in the budget or the entire spending plan. Any vetoes will be taken up in the final two days of the session. A majority vote of elected members in the House and Senate is required to override a veto.

From the Legislative Research Commission

Photo: Sen. Chris McDaniel (via LRC)

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