Steve Meredith's Legislative Update: State Budget Planning Adjusted For COVID-19

by Senator Steve Meredith:
​The Senate met its constitutional obligation to pass a state budget this week, but the spending plan was truncated because of COVID-19. It’s simply unclear how severe the disease’s impact will be on the amount of taxes collected or the citizenry’s wellbeing.
 
Instead of trying to pass a two-year financial plan with so many unknowns, legislators came together and crafted a 12-month budget using the most pessimistic revenue forecast considered by the state’s nonpartisan economic forecasters. The heart of the spending plan is the executive branch budget found in HB 352, which passed with overwhelming bipartisan support in both chambers.
 
HB 352 would eliminate all salary increases included in earlier budget proposals but would hold SEEK base appropriation at $4,000 per pupil. The acronym stands for Support Education Excellence in Kentucky, the formula used to allocate state tax dollars to local school districts. This bill would provide $7.4 million for school-based mental health service providers. Their services are required based on the language in the 2019 School Safety and Resiliency Act. 
 
HB 352 would also provide $1.6 million to support medical services at county jails and additional cash for the Kentucky Poison Control Center, which is running the state’s COVID-19 hotline. No money would be taken from accounts held by professional and occupational boards and commissions under HB 352. Many of these professions, such as nursing, are on the frontline of the COVID-19 response.
 
Additionally, HB 352 would freeze funding contribution requirements for so-called quasi-governmental organizations, like health departments and community mental health centers, at the current 49 percent of employee pay. There were concerns that escalating pension costs could weaken the organizations as they are called upon to respond to COVID-19.
 
Unfortunately, HB 352 wouldn’t add additional money to the state’s budget reserve trust fund (our state “savings” account).  It is also not clear how much of the more than $300 million that was expected to be available in the fund will actually be there once the fiscal year ends on June 30.
 
A related revenue bill, known as House Bill 351, was amended in the Senate to include language that would grant the governor, secretary of state and the board of elections additional flexibility in conducting the 2020 primary election, now set for June 23. Current law permits the governor and secretary of state to change the time or place but not the “manner” of an election. This would allow the two elected officials, in conjunction with the board, to develop an election procedure more open to absentee voting, which may be necessary because of COVID-19.
 
The Senate also passed the judicial and legislative branch budgets in addition to the state’s highway plan, which would still extend over 24 months. All of the budget-related bills have been delivered to the governor, including HB 351.
 
The Senate has decided to recess for as much time as possible to minimize everyone’s potential exposure to the virus. However, we plan to return on April 13 to begin considering any veto overrides and possibly give final passage to a handful of other bills.  But, our leadership will continue to monitor the COVID-19 emergency and make adjustments in our schedule accordingly. The Kentucky Constitution prohibits the legislature from conducting business in even-numbered years beyond April 15.
 
While we are all ‘hunkered’ down in our homes enjoying our families and the beginning of Spring, I would urge everyone to please make sure they have filled out the questionnaires for the Census.  This is vital for federal funding and future projections for our communities.
 
Take care of each other and stay healthy.  It is an honor to represent you in Frankfort. 

If you have any questions or comments, call me toll-free at 1-800-372-7181 or email me at Stephen.Meredith@LRC.ky.gov.  You can also review the Legislature’s work online at www.legislature.ky.gov.