Legislative Update – 3/25/16

FRANKFORT, Ky. – Addressing Kentucky’s underfunded pension systems was the top priority in the Senate’s version of House Bill (HB) 303, the state’s two-year budget, which passed the Kentucky Senate on March 23.

One major difference between the Senate’s budget and the House’s budget it passed last week is structural balance. That means that our budget does not use one-time funds to pay for recurring expenses. We are also dedicating more funding to the Kentucky Teachers’ Retirement System (KTRS), in addition to more funding for the Kentucky Retirement Systems’ (KRS) nonhazardous fund than both the Governor and House combined.

We are dedicated to funding our pension systems, especially to that of KRS, which is dangerously underfunded. Unlike the House, we are setting aside $250 million for a permanent fund. Of that permanent fund, $3 million would be used to commission an external performance audit of the KTRS while holding the remaining $247 million to address the pensions upon completion of the audit. In total, 100 percent of the permanent fund will be used to address the pension crisis once the audit, which will be used to identify areas of failure in the system, is completed.

The Senate budget also provides $372.5 million for the Budget Reserve Trust Fund, which is the highest amount in the Commonwealth’s history. This fund provides for unexpected expenses such as natural disasters, SEEK reductions, economic development, and other such events.

One of our main goals in this budget is to cut our state’s long-term debt. By moving forward with certain budget reductions and reducing bond use in project payments, we hope we can reduce the strain on our children’s financial situation in years to come.

While debating the budget, we also passed a number of bills through the Senate this week:

  • Senate Bill (SB) 299 is a proposed constitutional amendment that would give the Kentucky General Assembly, if approved by Kentucky voters, the ability to set parameters to allow people convicted of certain low-level felonies the right to vote. This amendment would be put on the ballot in November in order to give the citizens of Kentucky the right to decide.
  • House Bill (HB) 38 would establish regulations for ziplines, a growing attraction across our state, in order to create universal safety standards for the popular pastime.
  • SB 256, relating to military service, would allow for any high school student participating in basic training required by a branch of the United States Armed Forces to be considered present for all purposes for up to 10 days.
  • HB 115 would encourage the diagnosis and treatment of colon cancer across Kentucky.
  • HB 59 would help protect victims of violence by making it harder for their abuser to obtain their current address of residence.
  • HB 225 would make it easier for veterans to obtain a professional license or certificate after meeting certain criteria based on the skills they learned during their service.
  • HB 4 would increase the penalties for trafficking synthetic drugs.

After being debated on and finalized between members of the House and the Senate, the budget will be sent to Governor Bevin to be approved – or vetoed. Once Governor Bevin gives final approval during his 10-day veto period, the House and the Senate will have one more opportunity to make final changes.

If you have any questions or comments about these issues or any other public policy issue, please call me toll-free at 1-800-372-7181 or email me at Damon.Thayer@LRC.ky.gov.  You can also review the Legislature’s work online at www.lrc.ky.gov.

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