Senate version of state budget prioritizes funds for pensions, education, and public safety without tax increases

As the state struggles to meet its financial obligations, the Senate version of the next two-year state budget puts an emphasis on record levels of funding for education, pensions, and public safety while being forced to make cuts to other areas of state government without any new revenue.

In meetings of the Senate Appropriations and Revenue Committee Tuesday where the budget bills were passed, Sen. Chris McDaniel explained it is the priority of the Senate to not raise taxes on Kentuckians to “make up for the mistakes” of past leaders.

McDaniel said the Senate’s decision to invest record amounts in education, pensions, and public safety comes at a cost as they are not able to fund many programs.

Pensions costs are a focus of the Senate version of the budget as it contains the full statutorily required contribution for the Kentucky Teachers Retirement System and $425 million in the first year and $392 million in the second year for the Kentucky Retirement System’s non-hazardous employee plan. The plan also puts an additional $100 million each year for the state police pension plan.

In the Senate version of the judicial and legislative budgets, Sen. McDaniel said the state would not contribute to the pension system serving legislators and those in the judicial plan over the next two years. McDaniel said the move comes at a time when the fund is healthy and the state desperately needs to invest in other areas of state government and added the Senate would like to show leadership by example.

McDaniel explained the funding that normally goes to the legislative and judicial retirement fund, which totals $18 million, will go to the KERS non-hazardous plan, which he noted is one of the worst funded pension plans in the country.

Education funding reflects similar provisions in the House version of the budget with record levels of funding being allocated for SEEK, the state’s K-12 education funding, with per pupil funding being set at $3,984 in the first year of the budget and $3,985 in the second year. The Senate budget also restores funding to transportation in the SEEK formula that was previously reduced by the governor.

Cuts in the budget were similar to that of the governor’s proposed budget with the governor’s recommended reductions of 6.25% in the upcoming biennium for most budget areas in the Executive Branch were generally accepted by the Senate except for Veterans’ Affairs and Kentucky State Police.

The Senate Appropriations and Revenue Committee passed the bills dealing with the budget Tuesday and they now move to the full Senate for a vote.