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The Governor's Budget Address Summary

Here are some facts regarding the Governor's Budget Address presented on Tuesday, January 28, 2020.

One of the biggest chunks of state spending is allotted for education.  The governor wants to increase SEEK funding per student to 1%, which averages to around $40.00 per student.  He has budgeted a $2000.00 pay increase for teachers, while requesting a 1% increase for all other state employees in the first year of the budget, with another 1% increase the second year of the budget.  He did discuss having some funding in the budget for SB 1, the School Safety Act, but stated that other parts of the statute will be funded later.  Considering the Senate has passed SB 8 to tighten up SB 1 (2019), it will be interesting to see what happens, as the language in SB 8 declares the act to be an emergency.  This means there is some emergency cause that if the bill is passed, the usual 90 days' wait will not take place, and the statute will take effect immediately.

One thing we noted in the address regarding pension funding was the Governor stated he had budgeted for the pensions as required.  TRS is the only public pension that does not use the term "actuarily required contribution" or ARC in the statutes for its funding.  The statutes say, "required funding" which would be millions below the ARC.  Other pension systems had the statutes changed during reform a few years ago, and SB 151 (the sewer bill) changed the funding language to be an actuarily required amount or ARC.  But that statute was voided.  Therefore, the funding language as codified for TRS remains as "required amount."  We cannot make any statement as to what the Governor intended in his address, and it remains to be seen what the final outcome will be as the budget is far from being passed. 

The Budget Committee of the House and all its subcommittees will be working on the proposed budget for the next 30 days.  When passed by the House, the budget will be handed off to the Senate Budget Committee and all its subcommittees for another 30 days before the final budget is submitted back to the Governor for his signature or veto.  If he vetoes the budget, the legislature must then override the veto during the last two days of the legislative calendar in April.

Week Nine of the 2020 Legislative Session

A $23.4 billion budget has advanced from the House to the Senate, as the House version of the budget was passed Friday.  This budget, in the form of HB 352, passed the House vote 86-10. The Senate will now do its own work on the budget proposals.  When the budget is finalized between both chambers, it will then proceed to the Governor for his decisions. Any item he vetoes can then be overturned in a final vote by the Legislature during the final two days of this session, April 14 and 15. Once the Legislature approves or overrides that version, it is final and will be enacted July 1, 2020.

Some important issues in the budget are teacher pay raises.  The Governor proposed a $2000 increase for all teachers, with no provisions for other school employees.  The House has not considered that amount, but instead gave EVERY employee a 1% raise each of the next two years, in addition to all state workers. This money for school employees comes from and is written into the overall spending for education. All public pensions will be funded at their ARC (actuarily required contribution) with $1.1 billion appropriated to the TRS.  This budget also allocates a guaranteed per pupil base funding, or SEEK. It grants $158 million for preschools for low-income families, and $97 million for Family Resource Centers and Youth Services Centers. 

In relation to schools, this budget includes $18.7 million for school facility upgrades, and $49 million to hire more school counselors to become compliant under SB 1, the School Safety Act. 

In further news, the Senate Education Committee has passed SB 10, which returns the state Board of Education to being organized under the intent of the original KERA Reform Act passed in 1990. SB 10 mandates that governors appoint members to the state Board of Education that reflect the gender, political, and racial composition of the state.  There are ethics requirements included to avoid conflicts of interest. It was pointed out in the hearing that the Governor can re-appoint any current BOE members who meet the qualifications, and the new board would have to meet the gender, political, and racial composition requirements. This bill is the response of the Senate, who is constitutionally required to ratify Executive Orders by April 15.  The Senate has not ratified the current appointments to the new Board of Education. 

In a side note, the Senate has passed SB 150, which aims to stop surprise medical billing from providers when they use services or doctors outside of a network without the patient's knowledge, and then pass on "balanced billing" to patients.  It also requires the state insurance commissioner to establish a database of health care service charges. (We have all experienced that surprise.)

If you have questions or opinions about specific legislation, please contact your legislator at 800-372-7181 or email them at firstname.lastname@lrc.ky.gov.  This update is provided by reports from LRC staff at the Capitol.

Week Eight in the 2020 Legislative Session

Currently legislators are working daily in caucuses and meetings on the new budget to be presented to Governor Beshear after April 1.  

SB 62  passed the Senate by a vote of 29-7 to propose a constitutional amendment restoring voting rights to certain felons who have not been convicted of treason, election bribery, sex offenses, violent crimes, or a crime against a child.  This bill is now before the House for consideration. 

HB 32 to tax vaping products passed the House 75-17 and now proceeds to the Senate for consideration. 

HB 390 passed with an 81-0 vote in the House giving adoptive parents the same rights to leave policies as birth parents receive.  It is now before the Senate.

SB 156 passed the Senate with a 30-7 vote which requires KDE to develop plans to transition state-operated secondary voc/ed centers to local school districts by mid-2024.  This bill is now before the House for consideration. 

HB 475 proposes a constitutional amendment to remove restrictions on how the Legislature allows local governments to levy certain taxes.  If approved by the full House and Senate, the proposal would be decided by voters in a statewide election this fall. 

SB 58 passed the Senate 33-4 which would prohibit a governor from pardoning or commuting sentences 30 days or less before a gubernatorial election.  If a governor is re-elected, pardon powers would be restored on inauguration day.  This bill is now before the House.  If passed by the House, this measure would also have to go before the constituents of Kentucky, as it would change the constitution.

SB 182 passed the Senate Judiciary Committee and is now before the full Senate.  This bill would make it illegal to post personally identifying information about a minor online with the intent to intimidate, abuse, threaten, harass, or frighten.

 In other news, the state Board of Education denied the appeal of River Cities Academy v. Newport Independent Schools in the application process for the state's first charter school.  Funding issues were the main reason for the denial.  It has not been stated if River Cities Academy plans further litigation.

Federal Judge Van Tatenhove released his ruling this week regarding the prior members of the state Board of Education v. Governor Andy Beshear.  He has ruled that prior members did suffer "concrete injury," but he denied their request for an injunction.  His ruling allows the ousted board members to proceed with litigation.  It has not been announced what their next steps will be. 

Week Seven in the 2020 Legislative Session

The House and Senate Education Committees did not meet this week. Therefore, no new education legislation was brought forth for consideration. The main news of the week was that Governor Beshear did sign SB 8 which became law immediately upon his signing the bill. This bill arms all SROs with weapons, and also mandates numerous changes in providing students with mental health services. SB 8 has been explained in a previous email. You can find the full bill at https://legislature.ky.gov/Pages/index.aspx

In this upcoming week several newsworthy things are happening. On Monday, February 24, at 1:00 pm EST, each public pension system, including TRS and KRS, will be presenting their investment and cash flow update to the Public Pension Oversight Board. On Tuesday, the House Education Plans to meet at 8:00 am.

At 10:00 am on Tuesday there will be a special-called meeting of the state Board of Education. A few weeks ago, a group presented an application for a charter school called River Cities Academy to the Newport Independent School Board. The application was denied, and River Cities Academy filed a lawsuit against the Newport Board of Education. The state Board of Education plans to meet on Tuesday to discuss the lawsuit and the appeal. The Board will be required to come out of their planned executive session to announce what action they will be taken in this matter.

The Senate Education Committee is expected to meet at 11:30 am on Thursday.

On each day, KAPE legislative agents will be attending these meetings to bring you the truthful information.

Week Six of the 2020 Legislative Session

SB 156- This bill would require the state to develop plans to transition state-operated vocational education centers to local school districts by July 1, 2024.  This bill passed the Senate Education Committee and now awaits consideration by the full Senate.

HB 312- this bill provides foster children a bill of rights to expedite the transfer of the child's confidential records between school districts, improve faster delivery of services for the child's educational needs, require closed foster homes to be placed on a state registry, and clarify rules for foster home placement.  This bill alleviates problems many school districts face when foster children with special needs transfer into their district. This bill passed the House with a unanimous vote and now moves to the Senate for consideration. 

SB 101- this bill would require Kentucky's postsecondary institutions to accept dual credits from high schools. It was stated at the hearing in the Senate that some postsecondary institutions were refusing to honor credits high school students were earning. The bill passed the full Senate by a 38-0 vote and now passes to the House for consideration.

Week Five of the 2020 Legislative Session

SB 8- On Friday, February 7, 2020 the full House passed SB 8 with a 78-8 vote.  It has already passed the full Senate, and now proceeds to the Governor for his signature.  This bill enhances SB 1 (2019) the School Safety Act, and arms all SRO's, with additional mandates for mental health provisions in schools. The House members voting against this bill were Representatives Bojanowski, Booker, Brown, Glenn, Graham, Willner, Meeks, Scott, and Jenkins, most of them being from Jefferson County.

HB 22- This bill prohibiting corporal punishment in schools passed the House 65-15 on Friday.  It is now under consideration in the Senate.

SB 7- The full state Senate passed this bill with a 20-15 vote on Thursday.  This bill now proceeds to the House for consideration. SB 7 gives the power of hiring principals into the hands of superintendents and removes this responsibility from school-based decision making councils.  Under this bill, superintendents would still be required to consult with councils, but would have the final decision. In addition, this bill adds another parent member to the SBDM councils, and would equalize parents and teachers making up the body of those councils. 

SB 42- The full Senate passed this bill with a 35-1 vote on Thursday, and it now proceeds to the House for consideration.  This bill would require IDs for middle, high, and college students to list contacts for national crisis hotlines specializing in domestic violence, sexual assault, and suicide.  The requirement would go into effect on August 1, 2020, and would cover students in public schools, private schools, and all post-secondary institutions that issue student IDs.

Week Four of the 2020 Legislative Session

The biggest event of the week was the Governor's Budget Address on Tuesday, January 28.  Members of KAPE's legislative team were present in the House Gallery to hear the address.  The Governor's budget staff presented several bills to the Chair of the House Budget Committee, Representative Steven Rudy, where appropriations and revenue actions must originate.  Representative Rudy then becomes the sponsor of those bills (HB 348-356) as his committee works on preparing the House version of the Budget. When approved by the full House, the budget will then go to the Senate Committees and full chamber.

The Governor's budget plan was presented as "Education First" with plans to increase education funding over $400 million, give all teachers a $2,000 raise to be spread out over two years, $11 millions for textbooks, and a 1% increase in SEEK funding for pupils. 

The Governor also asks for $1 million in state funds to continue the program that was worked on under former Governor Bevin to enroll more children in the KCHIP program for Medicaid. In addition, Beshear plans to ask for additional taxes on sports betting, cigarettes, vaping products, and an increase for the LLC (limited liability corporation licenses for businesses) entity tax to generate more revenue. 

Some problems that were noted on the Budget Plan was the fact that the generation of new revenue rests upon taxes that have not been passed into law yet.  Also, the Governor has not included the $18.2 million for school security upgrades that was passed overwhelmingly in 2019 by lawmakers in SB 1. SB 8, which is a bill to tighten up increased security and provide money for mental health professionals to schools, will increase that need for funding.  The Governor's budget does not include any of that needed revenue, which has already passed the full Senate 35-1 this past week, and is now in the House for consideration, where it is expected to pass. 

In other legislation, HB 213 has passed the House which allows homeless teens ages 16 to 18 to receive outpatient mental health care without parental consent.  It passed the House unanimously and now awaits Senate consideration. 

If you have comments or criticisms, please direct them to your appropriate legislator at 800-372-7181 or go to legislature.ky.gov for email and mailing addresses.  They wish to hear from you!

Week Three of the 2020 Legislative Session

The state Senate voted 28-10 to raise the age for purchasing tobacco products, including e-cig products, to 21 years of age. The amended measure, known as Senate Bill 56, was planned to be in alignment with federal law. The bill now goes to the House for consideration.

A bill impacting classified school employees in Kentucky has passed the House State Government Committee. This bill would change the anti-pension-spiking provision and would re-work the calculations that are credited to KRS. This bill allows employees to earn 10 percent plus $1000 in compensation so that employees would not suffer penalties from spiking. The KRS Board election ballots have changes in requirements, and health insurance rates are being re-calculated. This bill is HB 207, and will now be brought to the full House for consideration.

The House passed HB 153 which offers mental health first-aid training to educators, military personnel, faith leaders, and first responders. This bill now proceeds to the Senate for consideration.

The Senate passed the voter ID bill by a 29-9 vote. There were several ways included in the bill which a voter could use to present identification. If no identification was presented by the voter on Election Day, the voter can cast a provisional vote with them going to the County Clerk’s office to finish paperwork by the Friday after Election Day in order for their vote to be counted. SB 2 now proceeds to the House for consideration.

SB 8 passed out of the Senate Education Committee with provisions to arm School Resource Officers, along with requiring all SRO’s to be in uniform. All school districts will be required to have an SRO by the deadline proposed or risk not having building and expansion plans approved by the state. In addition, the SRO would be required to complete three levels of training and 120 hours of training. Other provisions include having one school counselor for every school and one mental health services provider for every 250 students. Senator Wise, sponsor of the bill, stated that funding for these services will be a budget priority.

If you have further questions or wish to make comments on these bills, please contact your Senator or Representative at             1-800-372-7181. They really do wish to hear from constituents on their opinions regarding legislation.

Week Two of the 2020 Legislative Session

Our Legislative Team has been verbally notified by Eddie Campbell, president of KEA and chair of the TRS Nominating Committee, that nominations to be a candidate in an election to fill a position on the TRS Board of Trustees is open to KAPE members to apply.  The deadline, according to the KEA website, is February 7, 2020 at 5:00 pm. For an application, go to kea.org, find the TRS Board of Trustee Nominations button on the left, and follow the instructions. The deadline is near, so if you are interested, please apply.

Both the House and Senate Education Committees met on Thursday, January 16th.

The Senate Committee did not consider any proposed bills but did hear updates on the 2019 School Safety and Resiliency Act.  Presenters discussed training for the School Safety Coordinators and organizing the School Security Marshall's office. Most of the discussion revolved around the set-up of the state offices and hiring of personnel to carry out the mandates of SB 1.  Testimony also included "inappropriate tasks" which school counselors were asked to do, rather than providing behavioral and mental health services to students. All schools have been assessed. It was recommended to the Committee that more SRO's must be hired to fulfill the requirements of SB 1. 

The House Education Committee heard testimony on HB 14, relating to tuition benefits for families of first responders who have died in the line of duty, and HB 190, relating to anti-bullying and making school districts more accountable with how they handle reports of bullying.  It was reported that districts vary in how they handle these reports, with many reports being ignored. Within this bill are requirements for investigation and response of incidents of bullying by school districts. Both bills passed the committee and will be sent to the full House. As always, you can read the full bills, as well as track their progress, by going to legislature.ky.gov and clicking on bill watch. Legislators continue to contact the KAPE Legislative Team and ask us to tell our members to contact them for your input on legislation. You can call at 800-372-7181 and ask for a legislator's office.  On this website are email addresses of all legislators. Please contact them with your input and opinions.

Week One of the 2020 Legislative Sesson

At the end of the first week there have been over 300 bills already filed on issues such as immigration, gun rights, vaping, pardons, voting rights, and education. As legislation is introduced, leadership of both the House and Senate is studying each bill and determining which ones will be forwarded to committees for consideration.  Final appointments to committees were made all week, and the rules which will govern this session have been formally adopted. Representative Joe Graviss has filed HB 235 which is to repeal SB 151, and to make some proposals for the pension systems. The section referencing teachers and educators is Section 40 of the proposed bill.

We urge all who are interested in specific bills or legislation to go to https://legislature.ky.gov/Pages/index.aspx and sign up for the bill watch service available on the official website. We continue to urge all citizens to contact their legislator at 800-372-7181.  Email and office contact information can be found on the biographical pages of each legislator.

While working in the Capitol today, Wednesday, January 8, 2020 we ran into some legal rock stars! KAPE’s legislative team had a great visit with Attorney General Daniel Cameron and Deputy AG Barry Dunn, previously counsel for KAPE’s Board of Directors. KAPE’s team is Executive Director Donna House, Director of Community Outreach Angie Berryman, and Director of Marketing and Promotions Jennie Watkins.                                            

End-of-year pension proposals made by state board

FRANKFORT—A proposal that the 2020 General Assembly consider adding the State Treasurer to its Public Pension Oversight Board was one of 10 recommendations approved today by the board.

Current board membership includes representatives of the Governor, State Auditor, and Attorney General but none from the State Treasurer’s office despite that agency’s involvement with the public pensions systems, said Sen. Jimmy Higdon, R-Lebanon, one of the board’s co-chairs.

“The Treasurer is also involved in the retirement systems, so (it’s) a recommendation that the Treasurer also be added,” Higdon said.

Another recommendation approved by the board would add state legislators as non-voting members to the boards of the Kentucky Retirement Systems and the state Teachers’ Retirement System. Doing so, said Higdon, would help educate legislators about the state’s complex pension issues. 

“We need all 138 members to understand (pensions), but if we can have several that really get a deep dive into pensions, the better off the General Assembly will be when it comes to pension issues,” he said.

Moving the state pension systems away from what fellow board co-chair Rep. Jim DuPlessis, R-Elizabethtown, called a “percent-pay model” to a “liability-based model” was another recommendation approved today. DuPlessis said the change would incentivize agencies to keep employees in the pension systems by assigning each entity their actual pension liability.

DuPlessis has pre-filed legislation for the 2020 Regular Session that he says could bring some of those changes about.

“What you’ll see, I hope, is (some) agencies which would be your rape crisis centers, your spousal abuse centers—they’re about a 31 percent of pay, is what they’re actually liability is. So when we have them at 49 percent, that’s higher than their actual liability is. And they’re about to move to 93 (percent),” he said. “So this is a fair way to assess liability to those who really own it.”

Other recommendations approved by the board today involve: improving the pension systems’ ability to absorb “large shocks” caused perhaps by investment or assumption changes; payment of KRS retiree costs affecting individuals with service in multiple state retirement systems; examination of the level of retiree health and pension fund requests for TRS; and funding of the actuarially-required contribution (ARC) of all state-funded pension systems by the General Assembly, among others. 

The PPOB tabled a few proposed recommendations, including a proposal by Rep. Joe Graviss, D-Versailles, to consider removing pension legislation enacted with the passage of 2018 Senate Bill 151 from Kentucky’s statutes. The legislation was declared unconstitutional by the Kentucky Supreme Court late last year. Those proposals will be heard at a future meeting, said DuPlessis.

All approved recommendations will be included in the board’s 2019 annual report. The report was approved today by the board, as required by statute, and will be published in coming days.

Some of the KAPE leadership team went to Frankfort on Friday, December 13, 2019 to meet with old and new friends

September 23, 2019 - Public Pension Oversight Board Meeting

KAPE's Legislative Team attended the Public Pension Oversight Board meeting on Monday, September 23, 2019. At this meeting the results of the audit of KRS and TRS performed by State Auditor Mike Harmon and his staff was presented to the PPOB.  Auditor Mike Harmon stated that SB 2, passed in 2017, was a bill meant to provide transparency on state agencies, and his audit revealed that 86% of contracts for investment services of pension funds and other services of KRS were not posted for public viewing.  Of the 281 contracts between KRS and others, only 12 were posted, and 269 were not posted.  He also stated that KRS has 110 investment managers handling investment funds TRS has 136 contacts are posted online for viewing by the public.  Both retirement systems countered that an Attorney General opinion released in 2016, before SB 2 was passed in 2017, gave them protection NOT to post contracts that would reveal information on carried interest, profit sharing, and how the investment managers are paid their fees.  TRS General Counsel Beau Barnes stated that TRS does not want competitors having access to the relationship between the System and the investment managers.

The auditor's report can be found at auditor.ky.gov

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