On Wednesday of this week, the Kentucky General Assembly took historic action to modify voting procedures in order to approve the state’s budget and several related bills. Legislators were required to record attendance in person, and were then permitted to submit votes via text from legislative offices, or from cars parked at the Capitol. The legislature has a constitutional responsibility to pass a budget, and without a budget in place by July 1, state government would be forced to shut down. Getting an approved budget to the Governor’s desk this week was an important and significant accomplishment.
Like most complex issues, there are some up sides and some down sides to the budget and related bills that were passed this week.
Good news first:
A one-year budget. While the state budget is typically approved for a two-year period, the General Assembly took an unprecedented step by approving a budget for just one fiscal year. This was a wise decision, given the economic uncertainty caused by the COVID-19 pandemic. When the legislature re-convenes in January, 2021, we should be able to consider the next year’s budget with a better understanding of the economic landscape.
SB 249 – pension relief. As part of Wednesday’s legislative work, SB 249 was approved to freeze pension contributions for quasi-governmental agencies for one more year. Without this relief, and with no new revenue to invest in social safety net programs, many of the state’s community mental health centers, public health departments, and domestic violence shelters would be forced to close their doors. The pension freeze applies to local governments’ retirement contributions as well. This is a short-term solution that essentially “kicks the can down the road” for another year, but granting relief that may allow essential safety-net agencies to keep their doors open for another year outweighs that concern.
Mental health in schools. The budget provides limited new funding for school districts to hire additional school counselors, school psychologists, school social workers, or licensed mental health providers. This funding goes hand-in-hand with the School Safety Bill that was passed as SB 1 in 2019, and revised as SB 8 in 2020.
Continuity. The budget passed by the General Assembly essentially continues the same austere state budget that is currently operating. While the current and continuation budgets reflect over a decade of severe spending cuts to education, health care, and investments in new jobs, at least this budget makes few additional cuts.
Teacher pensions and retiree health insurance. Both are fully funded in the approved budget. This is very good news!
On the problematic side:
Cuts to the Governor’s office. The budget approved by the General Assembly includes $500,000 in cuts to the Governor’s office. At a moment when Governor Beshear is setting a national example of executive leadership, this move seems not only misguided, but inexplicable.
No raises, new hires, or new Medicaid waiver slots. When work on the budget began back in January, there was promise of small raises for teachers, as well as for other public employees who have not seen raises for years. There was promise of reducing dangerously high caseload numbers by hiring hundreds of new social workers. There was promise of increasing Michelle P and Supports for Community Living Medicaid waiver slots, at a time when nearly 10,000 Kentuckians with intellectual and developmental disabilities are on waitlists for these slots. And there was a promise of new investments in public education, for both K-12 and higher education. None of those new investments are included in the budget.
Medicaid. The budget calls on the state to find another $20 million in restricted funds within the Medicaid budget without giving any guidance on where to find it. If this money cannot be found, the program could lose up to $90 million in federal funding. This is money we cannot afford to pass up.
Unnecessary restrictions in various state agencies. The Department for Military Affairs, Kentucky State Police, and Tourism and Transportation cabinets, and others face restrictions that could limit access to federal funding.
Breakdown in bipartisanship. Just the week before, we saw tremendous bipartisan cooperation in crafting and passing a COVID-19 relief bill, SB 150. This re-worked bill drew upon ideas from both parties in providing relief to workers, employers, homeowners, and all taxpayers. It was disappointing that the same cooperative spirit was missing from the budget process. Instead of meeting together in a bipartisan committee to hammer out a compromise between the House and Senate versions of the budget, Democratic leaders were excluded from closed-door discussions that led to the final version of the budget. On an issue that will impact the life of every Kentuckian, there is simply no need to conduct these discussions in private, with little public input, and limited input from the minority party.
Years of cuts, almost no new revenue. Even without the COVID-19 pandemic, this budget falls far short of the investments we need for our state to thrive and prosper. This is the result of short-sighted budget cuts of more than $2 billion over a dozen years, a refusal to meaningfully address new revenue streams, while simultaneously offering new tax giveaways for corporations and wealthy special interests. Even the small sum of revenue approved this year through taxing e-cigarettes was nearly all given away in new tax cuts that will benefit only a small number of Kentuckians.
The current pandemic puts the need for strong public investment into sharp focus. Now is the time, if ever there was one, for legislative leaders to take bold steps, to consider meaningful tax re-structuring in order to generate the investments needed to support Kentuckians and to move Kentucky forward.
Raises for teachers and other school employees, investments in higher education, access to healthcare including mental health, creating new jobs – should not just be campaign promises or political rhetoric They are vital investments for our state.
Times of crisis present many challenges. They also provide opportunities to pause and reflect, and to re-assess values. This can happen at the individual level, within families, in organizations, within communities, and within broad systems. I am hopeful that the present crisis will help us as a state to recognize the need for strong government, to understand that investing in vital services is not a luxury but a necessity, and to appreciate the importance of science and evidence-based public policies to ensure progress and well-being.
Support and resources in a time of crisis:
Federal: While the state budget outlook is bleak, the federal $2 trillion coronavirus-relief package will be a significant help during this time. State and local governments will receive more than $1.7 billion, while those receiving unemployment payments will see an extra $600 a week for the next four months. The $1,200 rebate checks most of us will receive will total $4 billion here in Kentucky; our schools are slated to get nearly $200 million in federal funds; and increased Medicaid assistance could bring in almost $500 million. Well over $100 million more will go to help public transit; to buy more personal protective and medical equipment; to assist the homeless; and to help families with utility bills. Businesses and medical providers will be able to access potentially hundreds of millions of dollars in federal loans and grants, too.
State: For assistance with state-level benefits:
SNAP benefits info: https://chfs.ky.gov/agencies/dcbs/dfs/nab/Pages/snap.aspx
Small business support info: https://www.ksbdc.org/coronavirus
Unemployment info: https://kcc.ky.gov/career/Pages/default.aspx
Kentucky COVID19 hotline: 1-800-722-5725
Greater Louisville Inc has launched a new COVID-19 Crisis Support Hub for Louisville-area businesses, that also includes information for employees.
Jefferson County Public Schools is continuing to distribute free meals for students at sites throughout the county.
For Metro Government updates: https://louisvilleky.gov/news/what-you-need-know-about-coronavirus
Thank you again to our heroic healthcare workers, and to all of you who are putting yourselves at risk to provide essential services. Thank you to all of you who are being great friends and neighbors, and following guidelines by staying safe at home. Thank you to our teachers who are figuring out new ways to deliver content, and to support and connect with students. Thank you to all of you who are sharing resources, ideas, and positive messages on social media, and finding new ways to connect with one another.
Be safe, be well! We will get through this, and we will get through this together.