Lawmakers talk tax reform, education priorities, election results and more ahead of 2024 session

Ahead of the 2024 session of the General Assembly, the Kentucky Chamber hosted its annual Legislative Preview Conference to hear from lawmakers on the top issues that will be prioritized and the impact of the recent elections in Kentucky.  

Education and Workforce

The education panel stressed the importance of addressing current challenges like teacher shortages and test scores while also expanding options throughout the Commonwealth. Representatives Killian Timoney and James Allen Tipon along with Senator Steve West discussed the many education and workforce issues with moderator Amy Luttrell, president and CEO of Goodwill Industries of Kentucky.

In terms of teacher shortages and the idea of increased pay for Kentucky teachers, Tipton said there are workforce shortages in almost all sectors, and for the state to improve that moving forward, a strong education system is needed as well as more people going into the teaching profession.

“We are aware many surrounding states are increasing minimum salary level of teachers which puts increased pressure on the General Assembly. I don’t know how much but I do expect we will be looking to put more money in education with a focus on salaries,” Tipton said.

When talking about education funding, Tipton also noted that more than $1 billion per year is going into the teachers’ retirement system and with new projections, it could cost $2.5 billion in one year to keep up.

School choice was another topic of conversation at the event. West noted school choice is held back in many ways by Kentucky constitution. However, many bills will be filed in different forms during the 2024 session because “Kentucky shouldn’t be afraid of this. 44 other states, blue and red, have embraced school choice and it is time for us,” he said.

As for any other areas of focus, the panel talked about child care and the federal funding currently running out and the potential need to look at areas of Kentucky’s performance based-funding model to help certain groups get engaged in higher education and the workforce. Timoney also pointed to the importance of looking at Kentucky’s workforce data, which he said the Kentucky Chamber has been incredibly helpful in providing, and look at programs like option 9 and others that could help the state move forward.

Infrastructure and Technology

Representatives Josh Bray and Steve Bratcher, Sen. Brandon Storm, and moderator Ellen Call, senior director of government affairs at Charter Communications, talked about the policies that can help Kentucky grow its economy in the areas of transportation and data privacy.

The Kentucky Chamber has been a vocal opponent of legislation that sought to adopt European standards for use of consumer data that would be costly for businesses when it comes to compliance. Rep. Bray said there shouldn’t be a patchwork across 50 states when it comes to these policies. “We all want to protect constituents’ privacy, but we can’t be so heavy handed that we hinder Kentucky’s competitiveness. Why would you locate a company in Kentucky if compliance is so costly? I’ve read the Virginia bill and would hope something is similar to that. I appreciate Sen. Westerfield’s passion for the issue, but concerning to have that much bureaucracy involved in this issue,” he said.

The other lawmakers on the panel agreed if the federal government does not act, Kentucky legislation should look more like neighboring states than that of California and should consider the costs and compliance.

Also in the area of technology, the panel discussed legislation to allow autonomous vehicles in Kentucky. Ensuring the technology is not hackable and can keep up with things like construction on the road is important, said Storm, but Bray also stressed that the technology is being adopted in other states and businesses are ready to use it.

“What kind of state do we want to be? One that accepts innovation and entrepreneurship which drives the economy or one that sits back and watches impacts in other states before we move forward? Regardless of what legislation we pass, you are going to continue to see this technology advance,” Rep. Bratcher said on the issue.

Bills around AI and cybersecurity are also technology issues the lawmakers expect to see in 2024.

As for infrastructure, Kentucky is a logistics company hub and is looking to expand in that area. Sen. Storm noted Kentucky hasn’t been investing in freight and other forms of transportation, which should be considered, and stressed that riverports, airports, etc. can help make transportation safer in Kentucky.

Health care and substance use disorder

Looking at the health care needs of the state, Rep. Kim Moser said she is working on a maternal health bill because Kentucky is ranked second in terms of maternal mortality rate. She said the main issue is insurance coverage for pregnant moms, especially because pregnancy is not a qualifying event for enrolling in health insurance. Moser said her bill will focus on making sure moms are getting the coverage and education they need. She added she will also be working on access to care in the prior authorization space because it slows down care patients can get as well as looking at data including how we collect and how to better utilize and ensure transparency.

Rep. Rebecca Raymer discussed a bill previously passed that ensures health departments incorporate information about dementia and other diseases in their materials. Raymer also said youth vaping is now a huge problem, so she is looking to make some changes in that area.

Smoking and cessation continue to be a topic of discussion in the legislature, but Sen. Steve Meredith said it is difficult to change behaviors of individuals, so Kentucky needs more education of the huge cost burden of smoking on the healthcare system.

Energy and Environment

A panel including Rep. Josh Branscum, Sen. Robin Webb, Rep. Chris Freeland, and Rep. Jim Gooch had a conversation on the energy and environmental policies that will be prioritized during the 2024 session to ensure the Commonwealth maintains affordability and reliability compared to other states.

Branscum recapped the legislation passed during the 2023 session to streamline the process of taking solar panels offline to reduce the burden on landowners. 

Gooch discussed the Waters of the U.S. Supreme Court case and the critical impact of this issue on the business community. Read more about the case the Kentucky Chamber is leading to protect businesses from harmful regulations and policies. 

Panelists also talked about the importance of an all of the above approach to energy. They also discussed the need to have energy sources that are reliable especially during weather events.

Election Analysis

Following the 2023 election last week, Scott Jennings of RunSwitch PR and CNN, Mark Riddle of Future Majority, and Kentucky Chamber Senior Vice President of Communications and Marketing Jacqueline Pitts provided analysis on the results and what they mean for the Commonwealth.

After the election results rolled in, former President Donald Trump said Cameron couldn’t pull off the win because of Mitch McConnell, not because of his endorsement. But McConnell wasn’t visible during Cameron’s campaign. Jennings said that was a way to deflect and noted that many of the Republican down ballot candidates who won by big margins have worked for McConnell and had no issue in the election.

As for what comes next for Cameron, Jennings said we haven’t seen the last of him and he could run for another office, go back into law, or any number of things.

Beshear, meanwhile, is being talked about quite a bit at the national level as a potential presidential candidate as a popular Democratic governor in what is considered a “red” state. Riddle said it has worked for others like Bill Clinton and Jimmy Carter who were governors before running for president.

When asked by Pitts who they expect each party to run in the next governor’s race, Jennings suggested the possibility of Secretary of State Mike Adams, Agriculture Commissioner Ryan Quarles, as well as many others stating the Republicans have a good bench currently. Riddle said that Lt. Governor Jacqueline Coleman would be a natural fit to be the next governor on the Democratic side.

The panelists also discussed national voting trends and the impact those trends have on future elections and the political landscape for the next election cycle as Sen. Joe Manchin of West Virigina has announced his retirement which would likely flip the Senate to Republican in the next cycle. And in terms of the race for president, Jennings said the campaigns on both sides of the aisle “have to feel like there is a piano hanging over their heads most days waiting for it to drop” because of the fragility of both Trump potentially being convicted and the perceptions surrounding Biden’s health.

The panel wrapped up by thanking those in the room who have run for office, noting it takes a lot of courage to run a campaign.

Floor Leaders

Senate Majority Floor Leader Damon Thayer and House Majority Floor Leader Steven Rudy said the focus of both chambers will be on many of the issues discussed throughout the day.

While the state did not hit the revenue triggers necessary to lower the income tax again during the next session based on House Bill 8, the state’s personal income tax will now be 4% starting in January 2024. Both floor leaders stressed it’s important for the legislature to make fiscally conservative decisions to make sure the state stays on track in lowering that tax.

As for a local tax reform bill, Rudy noted that the hands of local governments are tied in many ways, but he expressed concerns about the timing of putting a constitutional amendment on the ballot in 2024.

Additionally, the two lawmakers indicated they expect to see some bills focused on crime, especially looking at juvenile justice.

Tourism and Economic Development

As Kentucky seeks to compete with other states for business, talent, and visitors, Representatives Rachel Roberts, Kim King, and Chad Aull as well as Sen. David Yates discussed what the state has to offer and what must be done in a conversation moderated by former legislator and attorney at Dismore & Shohl LLP Wil Schroder.

Rep. King emphasized Kentucky has so many things to offer for so many visitors and potential residents that have started to rebound since the pandemic and added that there is more work to do in that area.

A regional approach to economic development is important, Rep. Aull said adding it is better for jobs and businesses to locate in the county next door than a few states.

But as we look to attract new companies and talent, Rep. Roberts stressed that Kentucky has a lot of work to do when it comes to housing.

“In northern Kentucky, we have too many jobs and not enough people. But even if we get them to the jobs, we don’t have the housing for them. It is largely a regional problem to solve, but the legislature needs to be part of that conversation to ensure there is availability for people at all levels of income with different kinds of housing,” Roberts said.

Sen. Yates said we have to look at what Kentucky has to offer that others don’t. In many cases, Kentucky has a great cost of living, he said, and we have to ensure we are teaching to what businesses need so our talent stays in the state as well.

Budget and Tax Reform

This year, Kentucky missed some of the financial triggers built into House Bill 8, the bill to lower Kentucky’s individual income tax. So now, conversation turns to if lawmakers will vote to lower it anyway, if they will adjust the triggers, and how the state hits its next targets.

House Appropriations and Revenue Committee Chair Jason Petrie said the missed targets are not a failure but instead a sign the legislation is working as intended. He said fiscal discipline will be important moving forward to continue lowering the tax. And co-chair Rep. Brandon Reed said many opponents of the bill said Kentucky would look like Kansas when tax reform started but this shows the plan is working and the state is on track to lower the tax responsibly.

Senate Appropriations and Revenue Committee Chair Chris McDaniel and Co-Chair Amanda Mays Bledsoe said their chamber does not have any plans to lower the tax again despite the metrics not being met this year. Petrie said he is not going to take anything off the table because someone could bring legislation forward that could be examined.

Most panelists agreed they don’t expect to adjust any of the triggers in the bill because things are currently functioning as designed and the second you make one change, it opens up for many changes.  McDaniel said he would advise against changes.

One of the biggest budget discussions is teacher raises. McDaniel said everyone thinks SEEK is messed up but doesn’t have a solution for changes to that system. Everything, he said, has to function within that constitutionally. It has been budgeted within the SEEK formula and then should be left up to the districts with few restrictions.

In addition, child care funding is a major issue as money was coming from the federal government to support that sector through COVID and that money is running out. Sen. Mays Bledsoe said how the General Assembly chooses to address it without taking on that system long term will be a huge point of discussion in the 2024 session.

Legislative Leaders

Assessing the recent election results, House Speaker David Osborne and Senate President Robert Stivers said while not necessarily unexpected, it was disappointing to see Cameron lose on election night because it would have been great for the GOP legislature to have a partner in the governor’s mansion. 

When asked by Kentucky Chamber President and CEO Ashli Watts what they anticipate being the biggest focus of the 2024 session, the leaders discussed the priorities of the budget and many areas of education they think could be tackled.

When it comes to school choice, Osborne said the courts are sending a clear message that they will amend the constitution on that issue so he expects members of the legislature to be looking at that. He noted it will be an issue that’s important to message properly as it will be put in front of voters statewide. Stivers said the issue is made more difficult because it would have to be implemented by the Kentucky Department of Education which he feels would be hard under the current administration. 

Also in education, the leaders expect to see legislation dealing with Jefferson County Public Schools (JCPS). Osborne, who is from Louisville, said there are people with strong opinions on what that needs to look like but the implications of breaking up a district that impacts 17% of kids in Kentucky is very serious and the legislature needs to make sure they are putting together right group to help decide what that will look like. The leaders both said the transportation issue with busing at JCPS caught all the headlines but there are many other issues that must be addressed to help those children.

Beshear Administration

The conference wrapped up with an update from the administration of Gov. Andy Beshear.

Rocky Adkins, a senior advisor to the governor, pointed to historic investments seen across the state and strong momentum over four years. “We are seeing that Kentucky is the place to be,” Adkins said adding it is important to ensure people are continuing to work together to make things happen.

He touted infrastructure investments that have helped secure these new projects and commended the legislature on many items like broadband expansion, career and technical education investment, and others that have helped make the investments possible.

While he said there are headlines about the governor and legislature not working well together, he asked attendees to look at the results as he said Beshear has signed over 600 bills passed by the General Assembly and lawmakers were brought in on the investments like Ford Blue Oval and the projects in the Bowling Green area. He stressed that the governor and Adkins himself have an open-door policy for the legislature and he hopes they work together to make sure they don’t miss the opportunities in front of them.