Work Continues Kentucky Budget

FRANKFORT, Ky. — Lawmakers were back in Frankfort Thursday but they did not vote on a budget. 

Members fo the House and Senate say they are close but just aren’t quite there yet on the budget despite having met twice this week but say Wednesday they took a huge step forward. 

“Right now we’ve had a lot of agreement and working with the administration and the Senate as well,” said House Budget Chair Rep. Steven Rudy, R-Paducah. “These are unprecedented times, we made a lot of headway yesterday just agreeing what number to budget to.”

Those numbers were the pessimistic economic outlook, only estimating the state will generate around $116 million of revenue in 2021 and $175 million of revenue in 2022. As the COVID-19 pandemic continues to disrupt Kentuckian’s lives it is also disrupting the economy making it an increasingly hard task to craft the budget. 

“We’re going to have declining revenues but we are all in this together, so how can we present the best spending plan possible to help the most number of people,” said Sen. Morgan McGarvey, D-Minority Floor Leader. “I hope we can do that with minimal partisan fights and get something to the governor’s desk and have it be the best we can make it for the time being.”

With revenues likely to drop drastically across the one percent across the board raises for state employees and teachers are off the table. 

“With these times and what’s going on with the economy right now we have to be realistic too,” Rudy said. “No raises for state employees, no raises for teachers, no raises for anyone and just try and hold those lines.” 

The optimistic education budget, which saw increased SEEK funding, and money for textbooks for K-12 and increased funding to higher education will also likely no longer be possible. 

“Some of the first things we had really looked forward to being able to do, for the first time in a couple of years we were going to be able to increase some funding for higher ed, we are just not going to be able to do that right that now,” said House Speaker David Osborne, R-Prospect. 

Funding to hire 50 new social workers each year in the biennium is also likely not going to come to fruition but lawmakers are hoping to be able to provide some type of financial assistance to social workers who will be working overtime as at the pandemic continues. 

“Obviously this is an important time to give some relief to social workers, they are going to be dealing with a lot of additional workload right now so we need to do all we can to provide additional relief,” Osborne said. “Whether we are going to be able to provide all the relief we had hoped to I’m not sure” 

Also likely off the table is more than $1 billion taken from the Kentucky Teachers Retirement System if no structural changes had been made. 

“I’m glad to us not playing political games, the fact that we had the teachers retirement system potentially losing money in this budget at a time that we hadn’t discussed it, the Capitol’s closed, that wasn’t the right thing to do so I’m glad to see that part is out of the budget,” McGarvey said. 

This was included in the Senate version but not in the House, Speaker Osborne says the House fought to have this taken out to ensure the legislature continues to fully fund pensions. 

“For the two budgets that we will have been responsible for writing those will be the first two budgets in modern-day history that have completely funded the actuarially required contributions into the pension systems, it’s something that we take very seriously, it is really important to us, it’s important to our members, it’s important to the commonwealth that we acknowledge the indebtedness that we have to these pensions systems,” Osborne said. “That does not mean we do not need to talk about structural reform but in the process, we need to continue to live up to those obligations.”

The conference committee will meet again Friday. Lawmakers hope to have a budget finalized by April 1 when they resume the session.