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Lobbyists Talk General Assembly Issues to NKY Business Community

Written by Mark Payne, LINK Media politics & government reporter

John McCarthy said that this is the first time since he became a lobbyist that he has seen a House budget proposal come out before the governor, a move that could be seen by Democrats as a way for Republicans to control the budget process. 

McCarthy spoke as part of a panel at the Northern Kentucky Chamber of Commerce’s monthly Eggs N Issues event in Erlanger. 

McCarthy, of McCarthy Strategic Solutions, was joined by Chris Nolan of MML&K Government Solutions, and Marc Wilson of Top Shelf Lobby, and the event was moderated by Pat Crowley. The first item they dove into was the recent leapfrogging of Governor Andy Beshear's budget proposal by the House Budget Proposal

"Not since I've been lobbying or been involved with Frankfort," has McCarthy seen something like this happen, he said. He went on to say that this sort of political gamesmanship started during the court orders over executive decisions during the pandemic. But he said that everybody was surprised by how well thought out and thorough the House budget ended up. 

"Now what you have is a document out there that the House has sponsored and is likely to vote on soon," McCarthy said. He elaborated that the governor is in a situation where he had a press conference Monday where he announced a $2 billion investment in education and pre-school, which are initiatives that have been talked about a lot lately. 

"It is a big change," said Nolan. "The budget has always been a negotiating document, so it's the leverage that held everything else together over the last 20 to 30 years." 

The new dynamic of the House Republican majority did an excellent job of getting their budget out there, Nolan said, also noting how powerful the Northern Kentucky Legislative Caucus is because many members hold committee chair seats. 

"They held budget hearings all of summer and all of fall, monthly hearings," he said. "They did what they were supposed to do. They did their homework. They put together a plan. Why wait?"

Nolan said the House budget would most likely be passed in a matter of days, not weeks. Tax reform would come after the budget, he said. 

Next, the panel discussed some of other issues brewing in Frankfort. Marc Wilson talked about the issues his firm is working on for the budget with local clients such as St. Elizabeth Healthcare. 

“We have worked throughout the year on behalf of our clients on various tax issues,” Wilson said, also noting that they have tried to address the crucial topic of getting health care workers to stay in Kentucky. 

There will be a significant amount of surplus in the projections, McCarthy said. This money could potentially be used to solve infrastructure and transportation projects in Northern Kentucky, as well as workforce projects. Another area to pay attention to will be if the General Assembly uses some of this money to invest in modern technologies, such as unemployment insurance that took a significant hit during the pandemic when millions relied on the service. 

"This is the first time in a long, long time that the General Assembly has had money to spend," McCarthy said. "There are roughly four billion dollars between today, let's say, and until July 1 of 2024." 

He also said that could happen to other programs, such as child support.

"Unemployment insurance has been a debacle," McCarthy said. "It is unfortunate because the system wasn't ready for a decision that was made that was at the time we felt like we had to make, but we can't let that happen again." 

Another major issue has been the revenue shortfalls occurring between now and July 1 for nonprofits that work with the state government. The short-term shortfall needs to be addressed, according to McCarthy, as well as making sure enough recurring money is available to fund programs such as Medicaid. 

Tax policy will also be an important issue, according to McCarthy, noting that tax policy in states such as Florida and Texas drove 18-20 percent population growth. This leads to positive workforce participation. 

"Kentucky has to get off the number three worst workforce participation," McCarthy said. "I think our tax policy helps generate that."