(Update – 4/3/18 – 1:12pm CST: Replaced incorrect revenue bill summary document)
Linked below are the Free Conference Committee Reports for both House Bill 366 (revenue) and House Bill 200 (executive branch budget). Both bills have passed through the legislative process and the veto recess has begun. Because the bills passed before midnight on Monday, before the veto period started, the legislature has retained is ability to override any vetos.
Both bills represent a compromise for me in a number of ways, but ultimately, I am willing to support both because I do not believe we can cut enough from state spending in other places to make ends meet on many critical government services affecting public safety, public education, infrastructure and social services to name a few. Passing this tax overhaul lowers personal and corporate tax rates, and begins taking steps toward a consumption-based tax system (that still preserves exemptions vital for low income earners). Again, I do not agree with everything in the tax reform bill (HB366) but I was willing to support the proposal as a whole. As a result of the compromise tax plan we have been able to pass the first structurally balanced budget in more than 20 years. In other words, we have not used any one-time funds for recurring expenses.
Some of the highlights of the budget and revenue bills:
- The budget lowers the personal income tax for all Kentuckians to a five percent flat rate, it does NOT raise income taxes.
- This budget does NOT raid the employee health fund for outside purposes, and will instead use some of those funds for the benefit of state employees by shoring up pensions.
- We fully fund KTRS, KERS, and SPRS pensions as required by actuaries—over $3.4 BILLION over the biennium from General Funds.
- There will be NO funding for legislators’ retirement systems and those funds will be redirected to the unfunded liability in the SPRS.
- Budget Reserve Trust Fund (Kentucky's "rainy day" fund) at $304 million
- Veterans Affairs and the Kentucky State Police will have no funding reductions.
- KSP will receive authorization for lab updates and vehicle purchase funding.
- Provides an additional $1 million/year for KSP forensic lab tech salary increases
- Provides record SEEK per pupil funding levels & restores SEEK transportation funding
- Approximately $11.5 million per year will be allocated for cancer screening and research
- Approximately $7 million/year research and screening to be shared equally by UK and UofL
- $500,000 per year for both ovarian and colon cancer screening
- $2.5 million/year will be allocated for pediatric cancer research
- Smoking cessation will be allocated $7 million
- Funds the KY Mathematics Center, the WKU Mesonet, and provides an additional $31 million each year for performance-based funding for colleges and universities
- Appropriates approximately $56 million in Tobacco dollars over the biennium to the Early Childhood Development Fund with funds designated for foster care, adoption, and public health
- Adds approximately $28 million in support per year to increase reimbursement rates for private child caring agencies
- Allocates an additional $11 million each year to increase social workers’ salaries
- KCHIP will be fully funded with an additional $12 million allocation
- FRYSCS funding is fully restored
- Restores $7.5 in funding for the Preschool Partnership Grant Program
Both of those bills are lengthy so I have included summaries of the bills here below.