House GOP propose their own budget focused on pensions and education

UPDATED: Ahead of the unveiling of a new two-year budget proposed by the House Democratic majority Tuesday afternoon, the House Republican caucus announced their own budget proposal that focuses on education and pension funding.

After they put forward a plan to deal with Kentucky’s pension crisis Monday afternoon, the House GOP held a press conference Tuesday morning explaining what they would like to see out of the next two-year budget for the state.

House Republican Floor Leader Jeff Hoover said their proposal is the first budget crafted and put forth by a minority in many years and said he is proud of the efforts of their caucus.

In the proposal announced Tuesday morning, funding for pre-K through 12th grade is increased in some areas but the 9% cuts to higher education laid out in Gov. Matt Bevin’s budget remain intact.

Rep. Jim DeCesare of Bowling Green explained that their budget does give some relief to the state’s colleges and universities by covering 100% of their additional pension obligations because of the increased employer contributions in the first year and 75% in the second year. This would allow the universities flexibility in their retirement plans, which gives them the ability to move people into a different type of plan if they wish. This move would give the institutions agency bond authority for projects, tuition waivers and more.

A task force to start in the second year of the budget is also established to examine performance-based funding for higher education. DeCesare said the governor’s proposal to start basing a third of the funding for universities on performance in 2018 is included in their budget.

The caucus explained that in order to stay within the framework of the governor’s budget without touching the $500 million “rainy day” fund, the cuts to higher education could not be restored.

On the workforce front, the House GOP budget does include the $100 million bond pool for workforce development laid out by Bevin. Caucus members said that while they are supportive of efforts on workforce, they felt there needs to be some language pertaining to how the funds can be accessed and used, something they were unable to work into their proposal before going to print.

Because they were unable to get the language to set up those perimeters in their proposal in time for print, Leader Hoover explained they have filed an amendment to House Bill 626, the Work Ready scholarship initiative to provide dollars which would go to free tuition to the state’s community colleges, a plan put forth by House Democratic leaders.

Hoover said they are supportive of those efforts, which is why they chose to attach the language to that bill.

The House GOP proposal also includes items including the restoration of funds cut from veterans affairs, backed corrections funds, provisions pertaining to the coal severance tax dollars going straight to the counties, money for volunteer fire departments in the state and line of duty death provisions to ensure the allocation of those funds to spouses, cutting funding to planned parenthood and more.

All of these new expenses in this proposal are to be paid for through the savings made available with their pension plan, which is also included in the budget. Their pension plan runs the state’s funds through a different system in order to capture the maximum amount of available federal dollars, which helps put more money into the systems. Read more about their plan here.

The House Democrats will present their version of the budget in the House Appropriations and Revenue Committee meeting Tuesday afternoon. The House GOP filed their amendment to the budget bill in time to be able to present in the A&R Committee meeting as well.

The Kentucky Chamber’s Bottom Line will have all the details of the meeting and both proposals. Continue checking The Bottom Line for updates.

Categories: 2016 General Assembly, Education, Pensions, Taxes & Budget, Workforce Development

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