House passes their budget plans with increased funding for education, unemployment insurance, pensions, transportation, and more

The budgeting process is underway in the 2022 session much earlier than usual. The House introduced their version of budgets in the first week of session and the governor laid out his plan the following week.

The House budgets are already moving forward as the House passed their transportation and executive branch (general government spending) budgets out of committee and then off the House floor Thursday.

Every other year, the General Assembly has a 60-day “long session” to craft the state’s two-year state budget. Typically, legislation with a budget proposal is not presented by the legislative body until after the governor presents plans in a budget address mid-January.

The House, Senate, and governor all have their own budget proposals and the final version is typically crafted in a conference committee with members of the House and Senate before being passed by both chambers and sent to the governor.

Key House members involved in the crafting of their bills said since they introduced their budget proposals, they have met with members of the Beshear administration and incorporated recommendations in their bills.

House Bill 1, the House version of the budget containing plans for funding education, health, judiciary, pensions, and other areas, reflects the top priorities of the House.

Rep. Jason Petrie, the sponsor of the budget bills, told the House Appropriations and Revenue Committee that House Bill 1 budgets to the needs of Kentucky, not the wants. He noted the budget makes significant investments in education, pensions, unemployment insurance fund solvency, raises for state employees and more. But even with those historic investments, there is $1.14 billion in unappropriated funds left after this budget proposal.

“Those are not our dollars; they are not in our bank account. It is the taxpayers’ money; we have no claim or right to it. We need to look at how we can best return that money to the taxpayers,” Petrie said, noting tax reform to modernize the tax code could be a way to achieve that in this session.

House Budget Subcommittee chairs each came to the table to describe different areas of the budget during the committee hearing.

Key areas of spending in House Bill 1:

• Returns the unemployment insurance fund to pre-pandemic levels by allocating $312 million in federal American Rescue Plan Act (ARPA) funds
• Provides a 6% raise for public employees in the FY 22-23 and requires the Secretary of Personnel to develop a plan to revise the classification and compensation for funding in the second year.
• Increases in the Base SEEK guarantee to a record high dollar amount of $4,100 in the first fiscal year and $4,200 in the second fiscal year. Every dollar SEEK is increased translates to an additional investment of $800,000 in public school districts.
• Doubles state funding for full-day kindergarten in both fiscal years to cover the entire cost.
• Fully funds the actuarially required contribution for the Kentucky Retirement System at $1.2 billion per year.
• Fully funds Kentucky Teachers Retirement System at the actuarially required contribution rather than that required by law, allocating an estimated $1.067 billion in the first year and $1.084 billion in the second year.
• Provides $50 million additional in each year to the performance-based funding model available to the University of Kentucky, University of Louisville, Western Kentucky University, Murray State University, Northern Kentucky University, Morehead State University, and Kentucky Community and Technical Colleges.
• Allocates $350 million in American Rescue Plan Act (ARPA) funding towards clean water and wastewater projects to be allocated to each county by population.
• Raises the salary and institutes a retention payment for social workers, a $25.6 million increase in the first year and a $61.7 million increase in the second year.
• Provides a $15,000 pay increase to Kentucky State Police (KSP) Troopers and Motor Vehicle Inspectors.

House Bill 1 passed through committee with a 21-0 vote and passed 85-8 on the House floor.

Rep. Sal Santoro said House Bill 241, the transportation budget, is the “beginning to the end of underfunding transportation in Kentucky.”

Some highlights from that budget include:

• $200 million for the required state match to receive full federal funds for infrastructure projects
• $50 million in each year for special grants to help local governments with road maintenance
• $11.4 million for a grant pool for funds for the 57 general aviation airports around the state
• $200,000 in each year for each of the airports
• $100 million to go to a maintenance account for repaving and other issues in communities

The transportation budget proposal passed through committee 21-0 with one pass vote and with a 89-4 vote on the floor.

House Bill 1 and House Bill 241 now move to the Senate.