House committee approves budget proposal to give raises to all state employees, teachers

Putting a new spin on the state’s two-year budget spending proposal, the House Appropriations and Revenue Committee approved House Bill 352 on Thursday evening, which provides a one percent salary increase for all state and school district employees, including teachers.

Sponsored by Rep. Steven Rudy, House Bill 352 included several changes to the budget proposal submitted earlier this year by newly elected Governor Andy Beshear. The budget reserve trust fund, also referred to as the rainy-day fund was $392 million under the House version, which was an increase from Beshear’s initial proposal. The state debt ratio sits at 5.3 percent in House Bill 352, which is consistent with the Governor’s version and still below a common standard of 6 percent.

Regarding K-12 education, the budget provides $1.3 billion over the biennium to fully fund the Actuarially Required Contribution to the Kentucky Teachers Retirement System. It includes $61.7 million for retiree health insurance premiums in fiscal year (FY) 21 and relies on health insurance trust assets the following fiscal year.

The budget also includes a one percent salary increment for school personnel, including teachers both years, increases the per-pupil funding to $4,061 in FY 21 and $4,112 in FY 22, and provides $5 million per year for textbooks and other instructional materials.

The budget also provides $18.7 million to implement the school safety requirements of Senate Bill 1 passed in 2019 and additional funding to hire school counselors.

The Kentucky Communications Network Authority, which houses the Kentucky Wired program, had its funding reduced $34.4 million in each fiscal year in the House budget proposal.  Rep. Rudy said the budget passed in 2018 provided $110 million in bond funding for Kentucky Wired and noted that the program is now generating revenue for service and will receive an increase in restricted funds.

The budget appropriates funds from the Volkswagen Settlement for transit and school buses. School districts will be able to compete for $11.7 million for new buses, and an additional $8.4 million is available for transit.

At Thursday’s committee meeting, legislators also summarized changes to the Medicaid portion of the budget, including several new reporting requirements, and funding for increased social workers. Medicaid changes in House Bill 352 also proposed raises for state workers, new and expanded grants, adjustments to the performance-based funding model for higher education (including an additional $17 million in funding), and new and expanded programs in justice and public safety.

The bill now moves to the full House for a vote and will then be delivered to the Senate for further consideration and changes.