Legislative Update 3/20/2021

Dear Friends,

 The legislature met for two long days on Monday and Tuesday this week, the final days before the 10-day “veto period.”  In that brief period, well over 100 bills were passed and sent to the Governor’s desk, some good, some terrible, some “foggy.”  The fogginess results from so many bills coming to us in the final hours, many with amendments added or substitute language from the Senate, with insufficient time for legislators to read, let alone digest, discuss, and fully understand. 

Why the rush? The legislature will be back for our final two “veto override” days on March 29 and 30.  Anything the majority caucus wanted to get across the finish line had to get to the Governor’s desk by midnight on Tuesday, in order to give the legislature a chance to override any potential vetoes.  Any bills passed on March 29 or 30 can be vetoed, with no opportunity for a legislative override.
 
The Budget (House Bill 192)…
 
It is often said, and it is true, that a budget is a moral document.  We spend our money on the things we value; our state budget reflects the values of those in charge. 
 
The budget Governor Beshear proposed in January vs. the General Assembly’s proposed budget demonstrates a marked difference in values.  
 
The Governor’s budget modestly increased funding for schools, small businesses, non-profit organizations, the KY State Police, state social workers, and provided 1% raises for public school employees and other state workers.  His proposal set aside $100 million for the state’s budget reserves, which would take them to record levels.

The Governor’s budget was careful and compassionate. 
 
HB 192, the budget passed by the General Assembly this week, did not include a single new dollar for per-pupil funding, and basic education expenses such as public school textbooks remain unfunded.  There are no raises for school employees or state workers, and the more than $50 million the Kentucky Teachers Retirement System is requesting for its retiree health insurance fund was left out, too.  (Even though the teachers’ retiree health fund is in good shape, this reduction undercuts the 2010 “Shared Responsibility” plan that has done exactly what state leaders and educators alike had hoped. Kentucky’s public retirement plans are facing huge long-term liabilities because of the legislatures’ past failures to meet its obligations.)
 
On the unemployment insurance front, the General Assembly’s budget technically funds the re-hiring of 90 career-center employees – those workers responsible for handling unemployment insurance claims – but only with one-time federal funds, and with no guarantee these employees’ salaries will be covered after this coming fiscal year. 
 
HB 192 excludes nearly $4 million in proposed spending for our commonwealth’s and county attorneys, while the Attorney General’s office is poised to receive millions of dollars for extra security and personnel.
 
To be clear, money is available to cover all of these missing items from the General Assembly’s proposed budget.  But rather than invest dollars where they will offer relief and have an immediate impact, legislative leaders chose instead to add well over a half-billion dollars into the state’s “rainy day” fund. 
 
For many Kentuckians, this past year has not just been rainy; it has been a downpour. 
 
My only criticism of the Governor’s conservatively compassionate budget was that it did not go far enough for struggling Kentuckians.  While there was much to applaud and support, it did not propose new revenue at a time when so many Kentuckians are struggling, and when corporations and the wealthiest Kentuckians are prospering as never before, yet paying a very small share in taxes compared to working and middle class families.  
 
The Governor’s budget may not have gone far enough, but the General Assembly’s unnecessarily austere budget is downright stingy and mean. 
 
Unnecessary austerity, punitive legislation, and tax giveaways…
 
Two potent examples of the General Assembly’s stinginess are in SB 65 and SB 563.   
 
SB 65 would take away federal SNAP food benefits from non-custodial parents who are delinquent in their child support.  As I stated in House floor comments on this bill, “I voted no for the 6000 Kentucky children who will lose their SNAP benefits as a result of this bill.  No Kentucky child should have to go hungry, and especially not as a result of the action of this body.”
 
No other state takes such a draconian approach.  We all want child support payments to be provided on time, of course, but removing food assistance benefits from people who are already struggling because of lost jobs or reduced work hours is cruel, has no impact on state funding, and will adversely affect thousands of households. 
 
HB 563 sets aside $25 million in tax credits that, in a roundabout way, would help cover tuition and other educational expenses at private schools in Kentucky’s wealthiest counties.  There are many reasons to oppose public funding for private schools, in any form.  But without a penny of new funding to benefit struggling schools serving the vast majority of  Kentucky students, a tax giveaway for private school funding is unconscionable.  The good news is that the bill passed by the narrowest of margins, 48-47.  If the Governor vetoes HB 563, it will require 51 votes in the House to override the veto.
 
More tax giveaways:   The General Assembly’s budget provides $75 million for film-tax credits, despite the facts that Kentucky found them prohibitively expensive a few years ago and that many states are dropping them altogether.  The budget also increased historic-preservation tax credits twenty-fold, from $5 million to $100 million, with $6 million of that scheduled to go to an Ohio-based private equity firm to renovate Louisville’s Seelbach Hotel.  More here: https://www.courier-journal.com/story/news/politics/ky-general-assembly/2021/03/19/louisville-hotel-seelbach-owner-spent-thousands-lobbying-before-tax-credit/4747692001/
 
Another tax break – so new and broad that the legislature’s budget experts cannot even put a price tag on it – is on track to reward those who work at home for an out-of-state company.  Each eligible household could earn up to $15,000 over the next five years or even more if they are first-time home buyers.  This may or may not be a good idea, but since it was not even discussed in committee, it is difficult to know.  Ironically, it could lead to some companies actually leaving Kentucky to use our tax dollars to boost their employees’ paychecks.
 
According to analysis by the Kentucky Center for Economic Policy (KCEP) summarized in the table below, the General Assembly could pass well over $600 million in tax breaks by the time its work is done at the end of this month.  And yet we cannot set aside more money for our students, teachers, and social workers.  As stated by KCEP executive director Jason Bailey, “We are giving away huge portions of our budget — not just now, but for the future, in some cases in perpetuity — to private interests who have lobbied for these giveaways.” Bailey said.  Read more here: https://www.kentucky.com/news/politics-government/article249999584.html
 

 Summary of 2021 proposed tax giveaways, courtesy of KY Center for Economic Policy

           
 Additional harmful bills…

  • HB 258: Reduces retirement benefits for teachers hired in 2022 and beyond.
  • SB 228: Limits the Governor’s ability to fill a U.S. Senate vacancy.  Appointee must be of the same party as senator, and this contains rules for special elections in these cases. (Many are referring to HB 228 as the “Mitch McConnell Retirement Plan bill.”)
  • HB 405: Includes up to $5 million extra for the Attorney General’s office for extra personnel, and includes a potential $902,200 cut to the state budget office if the administration spends federal stimulus dollars without General Assembly approval.
  • HB 312: Reduces public access under the Open Records Act, including a provision giving legislative leaders sole authority over what legislative records qualify.
  • HB 475: Prevents localization of workplace safety laws.
  • SB 8: Makes it easier to opt out of vaccine requirements, even though KY already has clear exemption language in place.
  • HB 4: This Constitutional amendment, if passed by voters, would let the General Assembly effectively call itself into special session for up to 12 extra days a year. 

Some good bills…

  • HB 126: Raises felony theft limit from $500 to $1,000
  • SB 128: Gives school districts the flexibility to offer a “do-over” school year for K-12 students because of COVID-19.
  • HB 95:, Caps insulin costs at $30 a month for diabetics in state-regulated health insurance plans.
  • HB 472: Doubles the current statute of limitations for misdemeanor sex abuse offenses against minors from five to 10 years.
  • HB 140: Codifies telehealth provisions that expanded access to care during the pandemic.
  • HB 38: The interstate compact for psychological services is promising for workforce development and access to services in a state with far too few licensed mental health providers to meet the need. 
  • SB 61 and SB 74: I’m one of a huge and growing number of Kentuckians whose family has been deeply affected by Alzheimer’s. The legislature did good bipartisan work on this issue to improve training for care providers, and to better coordinate resources for families and people living with this terrible disease.

Good bills that have stalled…

 
Additional references…

Here are some additional articles that provide a good overview of this past week in the Kentucky legislature:

https://www.kentucky.com/opinion/linda-blackford/article250025759.html
 
https://www.courier-journal.com/story/news/politics/ky-general-assembly/2021/03/17/kentucky-legislature-passed-5-big-bills-before-veto-period-deadline/4729218001/
 
https://wfpl.org/kentucky-politics-distilled-the-veto-period-rush/
 
To be continued…
 
I’ll be back with another legislative update after March 30 to give you my perspective on our final two days of the 2021 session.
 
Thank you again to all of you for your engagement this session, and to those of you who’ve been in contact with me.  You can email me by responding to this message, or at my legislative email: Lisa.Willner@lrc.ky.gov.  The toll-free message line is 800-372-7181.  To look up bills including actions taken, amendments, committee substitutes, and vote histories, visit the General Assembly webpage at legislature.ky.gov.
 
In community,
Lisa