Kentucky lawmakers agree to budget for only one year with limited spending

As the state faces great uncertainty in the midst of the COVID-19 pandemic, key lawmakers unveiled plans to vote on a one-year spending plan on Wednesday in a rare move for the Kentucky General Assembly. The announcement came Tuesday on KET as Budget Committee Co-Chairs Steven Rudy and Chris McDaniel said the agreement was a result of lengthy discussion between members of the House, Senate, and the Beshear Administration. The Kentucky General Assembly typically votes on a two-year spending package during even-numbered years.

Rudy and McDaniel stated the one-year budget will continue to fund K-12 education at its current level, fully fund the actuarially required contributions for the pension systems, place a two-percent stop loss in place for performance-based funding for universities, increase funding for poison control and the COVID-19 hotline for the current year and 2021, and freeze the pension contribution rate for state universities and quasi-governmental agencies.

It was recently decided by the Budget Conference Committee they would remove increases in state employee pay and K-12 and post-secondary education funding that had been included in previous versions of the budget.

The new budget is based on the most pessimistic economic prediction put forth by the consensus forecasting group back in December. Previously, legislators had agreed to use a control/optimistic projection, and the difference means they need to reduce the budget by $115.7 million in the first year and $174.5 million in the second year.

While the latest proposal programs approximately $303 million in Budget Reserve Trust Fund, the chairs expect that money to be depleted to deal with  budget shortfalls that arise from lost revenues during the pandemic.

The General Assembly plans to return next January to consider any adjustments to the FY 21 budget (one year passed this session) and adopt the second year of the budget.

Rudy and McDaniel said details of the full budget would be available later Tuesday and voted on by the House and Senate on Wednesday. They noted all other budgets including Executive, Judicial, Road Fund, and the revenue bill would all be heard Wednesday as well in specially called committee meetings.

The legislature will convene Wednesday to consider additional measures before a 10-day veto recess that begins Thursday, meaning Wednesday is the last day for the Legislature to pass any bills while preserving its ability to override gubernatorial vetoes. . The final legislative day of the 2020 Regular Session is scheduled for Wednesday, April 15. Stay tuned to The Bottom Line for more updates.

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