The 2020 Kentucky Legislative Preview, a one-day gathering of the most prominent and influential policy-makers in Kentucky, featured expert analysis and prediction on what to expect in the upcoming 2020 session. The following story is a wrap-up of the many panels throughout the day.
With a new Democratic governor in Kentucky and Republican supermajorities in the state House and Senate, The Bottom Line Managing Editor Jacqueline Pitts sat down with Senate Majority Leader Damon Thayer and Senate Minority Leader Morgan McGarvey to discuss what to expect in 2020.
Both Thayer and McGarvey agreed the next two-year state budget would be the primary focus of the 2020 session of the General Assembly. McGarvey said he expects much of Beshear’s proposed budget will showcase his top priorities, predicting education and health care will be at the top of that list.
Thayer emphasized while the governor gets to submit a budget, it is ultimately up to the legislature to craft and pass the budget.
When it comes to the budget and the need for more revenue in Kentucky, both Thayer and McGarvey pointed to policies that will likely be discussed in 2020 to find some of that money including passing sports wagering, taxing vaping products, and more.
As for whether or not he believes Gov. Beshear will work in a bipartisan way with the General Assembly, Thayer said he has been impressed with some of the appointments he has made into his administration but pointed to some of his actions including “blowing up” the Kentucky Board of Education last week, adding his appointments still have to be confirmed by the Senate in the coming months.
Watch the full discussion with Thayer and McGarvey here.
Changing dynamics in Frankfort and a state budget with many needs was the focus of a panel with Senate President Robert Stivers and House Speaker David Osborne.
Kentucky Chamber President and CEO Ashli Watts asked about the first actions of Gov. Beshear since taking office, including restoring voting rights to more than 100,000 Kentuckians with a felony record and some of the appointments he has made.
Senate President Stivers said while many in the legislature don’t necessarily disagree with the policy of restoring voting rights, he disagrees with how things were done by executive order. Osborne said former Democratic House Leader Rocky Adkins going to the Beshear administration is a double-edged sword because he will miss Rocky’s presence in the House but the policy knowledge Adkins has will be extremely valuable to Beshear.
When asked what each of their priority bills are in 2020 outside of the budget, the leaders pointed to funding for school safety and prioritizing research as items they will be focused on.
Beshear Senior Advisor Rocky Adkins
Closing out the day, Rocky Adkins, who has served as the House Democratic leader and is now serving as a senior advisor to Gov. Beshear, spoke about what to expect from the administration in 2020 and top priorities.
Adkins said he is looking forward to working with the business leaders and legislators in the room in his new role. He also pointed to the fact that he and Andy Beshear ran against each other in the Democratic primary, and while they were both working to get the most votes, they always kept a respectful and civil tone which he feels is what they are now bringing to Frankfort.
In terms of what issues he feels the administration and business community can work on together, Adkins highlighted workforce development and meeting the needs of a global economy, growing the economy across the state, and dealing with the opioid crisis. He also said the administration wants to be a part of discussions on transportation funding.
Budget and Revenue
Senate Appropriations and Revenue Committee Chair Chris McDaniel says the state is already around $600 million in the hole before starting to craft the budget and noted tough choices will have to be made in 2020.
House Appropriations and Revenue Committee Chair Steven Rudy echoed those sentiments by stating the numbers are real and significant and the budget crafting process will be a challenge. Rudy noted the continuing costs of pensions, Medicaid, and other areas and said they will be looking at all areas and make the best decisions possible with taxpayer dollars.
With crisis comes opportunity for reform, Rep. Michael Meredith said. He added that’s where Kentucky is in many areas and he hopes to see the chance to make changes and improvements, especially at the local level.
As for what Gov. Beshear will recommend for a budget versus what they are willing to do, the panelists seemed to agree they look forward to seeing his priorities. The only things said to be completely off the table are basing a budget on money that isn’t there through bonding and other methods, understating the assumptions on pension returns and the prison populations that cause a shortfall in money that is allocated, and other “games” that have been played with a budget before.
House Majority Floor Leader Bam Carney, Sen. Max Wise, and Prichard Committee for Academic Excellence Executive Director Brigitte Blom Ramsey highlighted the key issues facing the state on education in a discussion with moderator Mardi Montgomery, Sr. Director Workforce Development & Community Engagement, Eastern Kentucky University.
Much of the discussion revolved around the actions and promises of new Democratic Gov. Andy Beshear in many areas of education. When asked about the $2,000 raise Beshear has promised during his campaign, Carney said while he knows most members of the General Assembly would like to see a raise for teachers as well as other state employees, he feels the state faces too many financial hurdles to be able to find the money needed.
As for Beshear’s decision to completely wipe out the Kentucky Board of Education and appoint all new members to the board, Wise said he believes the action is not in line with the intent of the Kentucky Education Reform Act and sets a bad precedent. Carney stated if this trend continues every four or eight years, it will be impossible for the state to attract qualified education commissioners. Ramsey added she hopes to see the General Assembly codify and protect the governance model and keep it separated from politics.
On the funding of the school safety bill passed in the 2019 session, Carney stated the legislature will be focused on finding ways to generate the revenue needed to fund that bill but added it will likely have to be done over multiple budgets. He pointed to possible options including using the money from taxing vaping products to begin the discussion.
Kentucky faces a struggle for funding to make improvements and build roads and bridges across the state.
Rep. Sal Santoro said he is working again in 2020 on legislation to generate more money for the critical area of transportation. Santoro recently sat down with The Bottom Line to discuss this issue and the reasons it is critical to pass a bill in the coming legislative session.
Democratic state Rep. John Sims said increasing funding for transportation is a bipartisan issue and noted it is important to have support from the executive branch on this issue. Sims also stated he feels a 10-cent increase to the gas tax that has previously been proposed does not go far enough to meet Kentucky’s needs.
The need for changes in the road funding formula goes beyond just roads and bridges. Ferdinand Risco, Executive Director of Transit Authority of River City (TARC) noted Kentucky is set to lose federal toll credits and the adverse impact that will have on many projects. Risco also stated at the end of the day, this issue is about jobs and even just a little more investment would result in a huge economic impact.
Criminal Justice Panel
A panel of key legislators spoke on the needs and challenges faced in Kentucky’s criminal justice system. Sen. Julie Raque Adams, Sen. Whitney Westerfield, Rep. Jason Nemes, and Rep. Jason Petrie discussed the issue with moderator Jennifer Hancock, President/CEO, Volunteers of America on Monday morning.
The lawmakers expressed a need to make the criminal justice system safer while also improving efficiency and effectiveness by looking at who the state is incarcerating and why.
There was agreement among the panelists that Kentucky’s pretrial system should be examined to ensure an individual’s mental and behavioral health, substance abuse issues, and other elements are considered and the best decision is made in each case.
Rep. Petrie stated it is important when examining and making changes to the criminal justice system to ensure constitutional rights of Kentuckians are being protected while also looking at areas of the system like pretrial, probation, and parole to ensure an effective process.
Sen. Westerfield noted the state has come very close but somehow avoided a massive incident at a prison due to overcrowding, understaffing and other issues. Sen. Adams pointed to the need to look into policies like letting addicted mothers stay with their children while they go through treatment to cut down on individuals in prison, children in foster care, and more.
Rep. Nemes said the legislature must stop passing bills creating new felonies and adding to the problem.
The panel also discussed the controversial pardons made by former Gov. Matt Bevin as he left office and expressed disappointment in the decisions made by Bevin and Adams added she believes it will make criminal justice discussions difficult in the coming year.
Health Care and Legal Liability
As the state seeks to improve health outcomes and ensure a strong health care system, experts from the field highlighted the biggest issues facing Kentucky.
State Sen. Ralph Alvarado, a doctor from Winchester, cautioned that if new Gov. Beshear eliminates the Medicaid waiver submitted by the Bevin administration, he will be knocking out more than just work requirements for participants. He emphasized pieces of the waiver, such as increased help for those with substance use disorder, access to non-emergency transport for those needing help getting to appointments, and other provisions. He said it will be detrimental to many if the waiver is tossed out.
A public health issue that has become a big focus in Kentucky in recent years, Foundation for a Healthy Kentucky President and CEO Ben Chandler said 28 percent of high school age children in Kentucky are using vaping products compared to three percent of adults, and added the numbers are likely even higher than that.
To address this issue, the panel highlighted bills that will be presented in the 2020 session including taxing vaping products at a similar level to that of the cigarette tax, flavor bans on e-cigarettes, and raising the age to purchase tobacco products to age 21.
Rep. Moser said work must continue to address the opioid epidemic facing the state and pointed to policies she plans to work on including ensuring medications needed to treat substance use disorder are provided in a timely manner, focus from providers to give alternatives to opioids, and more.
The Energy and Environment panelists which included Public Service Commissioner Dr. Talina Mathews, House Energy and Environment Chair Jim Gooch and member Rep. Adam Bowling and Kentucky American Water President Nick Rowe, discussed water and wastewater infrastructure, Kentucky’s coal economy, legislation expected for the upcoming session, and solar net metering.
Over the interim, a task force met to discuss addressing Kentucky’s water and wastewater infrastructure challenges. Rowe spoke about the importance of water supply for economic expansion and noted the role of regulators. “Everything we do is pretty transparent. They [PSC] are tough. They hold you accountable,” Rowe said.
Regarding the coal economy in eastern and western Ky., Gooch spoke about the importance of reliability and the fact that we can’t rely on intermittent sources for all our power needs. Commissioner Mathews stated that Kentucky may be able to hold on to its own plants and not lose any more. She noted independent power producers that don’t have a regulator are finding themselves not clearing the market and risk closure.
Rep. Gooch spoke about legislation geared toward protecting critical infrastructure, and Rep. Bowling talked about the importance of developing policies to keep coal production costs as low as possible.
In 2012…KY spending estimated $86.2B more than it collects and lawmakers made no attempt to solve problem. KY deficit growing. Only past Governor’s Patton, Fletcher, Beshear recommended “tax reform” to lawmakers, but were rejected. Bevins didn’t; he did not want to eliminate “obsolete exemptions”, which is a large impediment to a balanced budget. KY’s obsolete budget did get some attention in form of adding ‘selected services’ to KY’s obsolete tax base. However, included in State tax expenditures are billions of ‘obsolete exemptions as well as billions in tax give away’s to Disability (11B) Feds ($4.9B) State ($2.9B), Religious ($4.8B), Schools ($8.4B), city ($3.1B), County ($4.3B), Other ($4.3B). Total estimated $44.7B.
Then, there’s Corporations not paying their fair share + they have estimated $400M of obsolete corporate tax shelters that should be eliminated!
In addition, KY has been using borrowed money to pay it’s bill since 1994, the year State passed balanced budget amendment. Lawmakers borrowed from KY Road Fund costing it billions of federal dollars under Federal/state match program whereby Feds match every state dollar with $9 federal dollars. Lawmakers borrowing or taking from Road Fund caused it to suffer federal dollar losses for KY roads.
All of the “exemption totals above are from 2008, since no compiled lists exist from 2009-2019. B. Huff