Coronavirus Pandemic Hangs Over Senate Budget

FRANKFORT, Ky. — The Senate budget prepares for an economic downturn due to the coronavirus and looks at teachers’ pensions.

Throughout the committee hearing on Wednesday, Senate Appropriation and Revenue Chairman Sen. Chris McDaniel, R-Taylor Mill, referred to “bumpers” in place in case tax revenues fall short, a real possibility as many businesses are forced to close.

“We’ve talked through the process today about what is the very obvious reality which is we could see a substantial decline in tax revenues,” McDaniel said. “But I think what goes unsaid but needs to be said is the reasons tax revenues decline is because people’s incomes decline.”

The process looked very different than it did just a few weeks ago when the House unveiled its budget.

“The world has changed so drastically since December and all of us wish it were differently for the men and the women and the children, we truly wish it were different,” Said President Pro Tempore Sen. David Givens, R-Greensburg.

The budget includes $250,000 each year for the Kentucky Poison Control Center, who is tasked with fielding calls from residents concerned about COVID-19. While this is more money than was included in the House version, Senate Floor Minority Leader Morgan Morgan, D-Louisville, said it is not enough.

“The system is costing about $500,000 a month to operate now, and so while I appreciate the money being given to it, the system had 3,600 calls yesterday, these are calls that have to be taken by trained nurses, trained medical staff, it has to open 24 hours a day, 7 days a week as we try to combat the spread of this virus,” he said. “I think as a state it’s incumbent upon us to try and find funding for this essential service.”

A variety of buffers are in place as well, including a 1% pay increase for state employees in the first year of the biennium, but only a pay increase in the second year if revenue projections are met.

“The situation that exists now versus the situation the existed a mere two weeks ago is dramatically different in this nation both culturally and economically,” McDaniel said. “To that end, we have made a request for a statement from the office of the state budget regarding a potential revision to these budget numbers.”

The budget also focuses on the Kentucky Teacher Retirement System, withholding more than $500 million each year unless a structural reform to TRS takes place, however, with the session on a fast track as the pandemic continues, there is no legislation to create structural reforms and no input from stakeholders can happen as the capitol remains closed to the public.

McDaniel said it was important to make sure the Kentucky Employment Retirement System has funding if needed.

“I think it’s important to consider Senator that the worst-funded system is the KERS non-hazardous system and in the current environment that we have they may need every dime that we possibly we have to push that way, and this would allow for that mechanism to be available if necessary,” he said.

The SEEK formula increases to a per-pupil guarantee to $4,161.

The budget passed committee on Wednesday and is expected to receive a floor vote Thursday.