Ky. Senate committee speeds through budget bills with additional $1.7B for projects

Republished from WEKU.

With little opportunity for the public to weigh in, two newly-amended state budget bills appropriating more than $34 billion in Kentucky over the next two years cleared a state Senate committee Wednesday morning and could pass the full chamber later this afternoon.

The Senate’s version of the budget bills would chart a path toward state income tax reductions in 2026, increase spending on infrastructure and economic development projects and strip provisions threatening to take over underperforming K-12 schools.

The Republican chair of the budget committee from Ryland Heights, Sen. Chris McDaniel, was asked if the bills were moving too quickly for the public to read and digest.

“We’re confident in our members to be able to digest it,” McDaniel answered.

House Bill 1 and House Bill 6 were amended from what passed the House in early February, with copies of the new versions of the bill posted online shortly after clearing the Senate budget committee. The House passed the two bills less than 24 hours after a budget committee passed amended versions of them Jan. 31.

McDaniel briefly outlined the major changes in the budget bills before their passage Wednesday, with no committee members asking questions.

House Bill 1 previously appropriated $1.8 billion from the state’s budget reserve trust fund for one-time spending projects and public pension payments, but the amended bill added another $1.7 billion for specific projects.

Chief among these HB 1 additions is $890 million to go towards road construction projects in counties undergoing large population growth.

The bill also picks up on a proposal of Gov. Andy Beshear to fund a “13th” monthly check for retired state workers to account for inflation and the lack of a cost-of-living adjustment for retirees for more than a decade. The amended HB 1 adds $75 million for such payments, which would be tiered based on how long they’ve been retired and whether their annual benefits are more or less than $45,000.

Two of the largest specific appropriations are $150 million for a Commonwealth Center for Biomedical Excellence campus in Covington to support a cluster of life sciences companies there and $75 million to the University of Kentucky to “support and facilitate the development of nuclear energy.”

The amended HB 1 also directs $50 million for an economic development fund to the 16 counties with the highest unemployment rate and $100 million to Louisville Metro Government for the “revitalization” of its downtown, including projects such as the Butchertown Sports District, the Louisville Garden renovation and vacant lots revitalization.

As with the version of HB 1 passed by the House, the bill retains language that exempts all spending in it from counting towards the tax cut trigger mechanism of House Bill 8 passed in 2022 — helping to improve the odds of another income tax cut by 2026.

The version of HB 6 passing out of committee Wednesday is similar to what was passed by the House, in that it does not pick up on Beshear’s recommendation to mandate 11% raises for all staff of public K-12 schools and institute universal public pre-K for 4-year olds. Those two measures alone would have a price tag of $1.4 billion over the biennium.

While retaining the House’s increase of the per-pupil SEEK formula for funding K-12 schools by 4% and 2% in the next two fiscal years, the Senate version does not fully fund school transportation costs in the second year, lowering its funding to 90% of costs.

The amended and 244-page HB 6 would also double performance-based funding for public higher education, raising appropriations to $201 million over the biennium.

Another change in the Senate’s version of HB 6 is it removed langage from the House bill that defunded the Alternative Sentencing Worker Program within the Kentucky Department of Public Advocacy. A last-minute amendment in the House prohibited funds from going to the program, which employs more than 50 social workers who coordinate with attorneys, judges and prosecutors to create plans steering criminal defendants to substance abuse services for rehabilitation, instead of more costly incarceration.

The new version of HB 6 also removes language that threatens K-12 school districts with “takeover” if they don’t make progress on their employee recruitment and retention numbers.

After the meeting, McDaniel said HB 6 would increase the chances of meeting the tax cut triggers by removing about $390 million of spending, “specifically for the idea that we would be able to hit the trigger to lower to 3.5% at the beginning of 2026.”

After passing the Senate, HB 1 and HB 6 will likely head to a conference committee of the House and Senate to work out a compromise between the two budget bills, with its members chosen by leadership in each chamber.

State government and politics reporting is supported in part by the Corporation for Public Broadcasting.

Originally published by WEKU.

Republished with permission.