House passes state spending plan and transportation budget; Local schools will benefit

Published 2:00 am Friday, January 28, 2022

By Daniel Elliott
State Representative

In an extraordinary move aimed at giving us enough time to consider tax modernization, I joined fellow members of the House in voting 85-8 to approve a budget proposal to fund our state agencies, programs, and services. The version of the bill we approved includes record funding for education, a continued commitment to the state’s budget reserve trust fund, and pay increases for the Kentucky State Police, state employees, social workers, and educators.

Overall, HB 1 HCS includes $100 billion in funding from general, restricted, and federal dollars. While much of the money we allocate must go to specific categories, we have flexibility in investing the more than $25.6 billion in General Fund monies. Of the $25.6 billion in General Fund money, we invested over the two years covered in our budget, more than $10.7 billion (41%) goes to kindergarten through 12th-grade public education. While the bill does not specifically include a raise for educators, our goal was to provide additional funding so that local school boards can use their discretion to provide their employees raises. Overall, the budget means $1.3 million in additional money for Boyle County Public Schools and almost a million for Danville Independent. This includes a major increase in per-pupil funding (SEEK), funding for the entire cost of full-day kindergarten, assistance with transportation costs, and $24 million in additional funding for our Family Resource and Youth Services Centers (FRYSCs).

HB 1 HCS also includes increases in funding for our public universities and technical schools. The measure provides just over $1.7 billion for the same two-year period. Specifically, it provides $50 million 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. I am pleased to report it also includes $20 million in each year of the budget for a new health care workforce initiative. HB 1 HCS also increases an existing allocation by $42 million in each year for anticipated growth in each year for the College Access Program (CAP), Kentucky Tuition Grant Program, and Work Ready Scholarship Program.

The budget bill also takes aim at improving the services of our state’s health and welfare programs to make them more effective and efficient. While Kentucky ranks near the bottom in child welfare, the Cabinet struggles to find and keep qualified social workers. HB 1 HCS raises the salary and institutes a retention payment for social workers, what amounts to a $25.6 million increase in the first year and a $61.7 million increase in the second year. It also funds a hundred additional social worker positions in each year of the budget for a total of 200. To provide accountability, the bill requires the implementation of increased staffing be tracked and reported. The bill also raises the reimbursement rate for 1915c waiver services by 10% in each year. The bill also provides a pilot program to offer a mobile crisis service expansion to offer mental health services in rural Kentucky. In addition, the budget includes $7.2 million in additional General Fund dollars in the first fiscal year and $14.4 million in General Fund dollars in the second fiscal year to expand the Senior Meals program.

HB 1 HCS makes a much-needed investment in our state’s law enforcement agency – the Kentucky State Police (KSP). The bill includes a $15,000 pay increase for Troopers and an $8,000 annual increase for those who serve as KSP dispatchers. It also allocates money for integrated body camera systems, the third phase of a radio purchase, and a $28.5 million training facility at the training center at Eastern Kentucky University.

This budget also delivers clean drinking water to more Kentuckians, offers competitive salaries to employees, and ends the wasteful practice of borrowing money for smaller maintenance and repair projects and capital construction projects that cost under $3 million. All state employees will receive a 6% raise in the FY 22-23.

However, since the state has not updated its personnel classification and compensation plan in decades, HB 1 HCS would require the cabinet to do so.

Growing our economy today is how we will afford the progress we want for tomorrow. That means identifying economic development opportunities and investing in our tourist destinations. We allocated $100 million in each year for a Rural Product Development Initiative for business site development and invested $56.6 million in the first fiscal year and $67 million in the second year of the budget towards renovations and repairs at our state parks.

Once again, our budget fully funds the actuarially required contribution for the Kentucky Retirement System (KRS) and the Kentucky Teachers Retirement System (KTRS). KRS would receive $1.2 billion per year and KTRS is slated to get an estimated $1.067 billion in the first year and $1.084 billion in the second year. This is $629 million more in the first year and $646 million more in the second year than what we are required by law to contribute.

We also approved a transportation budget that, according to Budget Review Subcommittee Chair Sal Santoro, “…is the beginning of the end of underfunding our state’s transportation needs.” HB 241 includes an operating budget of $200 million in General Fund, $200 million in restricted funds, and $1.6 billion in road funds each fiscal year. It grants $200 million for the required state match for the federal infrastructure package; includes $50 million in each year for a special grant to help local governments with road maintenance; allocates $10 million in each year for a grant pool available to the state’s 52 general aviation airports. I am particularly pleased to see it replaces over $180 million in allocations formerly charged to the road fund with general fund dollars and moves that amount to the Maintenance Account. For too long the state has used road fund monies for services not associated with roads. It may all be state money, but this change makes how we spend it far more transparent.

As you can see, each of these expenditures adds up and it is easy to get carried away with the spending. After all, it is far more fun to spend money than save it. However, saving money was also a priority for us. Not only do we have more in our Budget Reserve Trust Fund than ever in state history, but we left more than $1.14 billion in anticipated revenue unspent. Why? Because we are keenly aware that this is not our money – it is yours. We budgeted to our state’s needs and worked hard to maximize every single dollar we allocated.

Ultimately, what is left provides us with an opportunity to return it to taxpayers in the form of tax modernization.

I will continue to report on the budget as it moves through the process. Remember, this is the House spending plan and the Senate will undoubtedly make changes before it goes to free conference committee. I hope you will feel free to contact me over the next few weeks.

You can reach me by calling 502-564-8100, through the toll-free message line in Frankfort at 1-800-372-7181, or by e-mailing Daniel.Elliott@lrc.ky.gov.