The House budget committee has approved the budget for the state of Kentucky that will restore education funding in the state while also making full pension payments and creating less debt than the governor's plan calls for.
Governor Matt Bevin had recommended making cuts to K-12 schools, higher education, and Kentucky Educational Television in addition to a number of state agencies. That extra money, totaling $1.1 billion, would be put toward the state's pension systems.
The extra money needed for the budget approved by the House would come out of several of the items Bevin had requested in his two-year, $21 billion budget. This includes a $500 million "permanent fund," which would come from a surplus in the state's public employee health insurance trust fund that Bevin said he would like to see put toward shoring up pensions, as well as almost half of the $524 million "rainy day" fund set aside in case of a downturn in the economy, and $100 million in bonds for unspecified workforce development construction projects.
The House budget would carry with it $548 million in debt. This amount is less than the $624 million proposed by Bevin and, according to House budget Chairman Rick Rand, makes it more fiscally conservative. Most of the state government agencies would still see the budget cuts suggested by Bevin, making up 4.5% this fiscal year, which ends June 30, followed by 9% over the next two years, reports Kevin Wheatley for CN2.
The House is expected to approve the budget by the middle of this week, after which it will move on to the Senate, with only 12 days left in the 60-day legislative session. A final version is expected in two weeks as the result of a conference committee containing members of both chambers. Bevin will have the final say on the matter.
Bevin spokeswoman Jessica Ditto said in a statement that the governor was "pleased to see that they clearly got the message from the people of Kentucky who are fed up with mortgaging their children's future through bonding billions of new debt."
However, she did criticize the House for the "bad habit of spending one-time funds for recurring expenses" and for eliminating Bevin's proposed "permanent fund."
"The governor looks forward to working with the House and Senate as the process moves forward, to ensure the ultimate enactment of a fiscally responsible budget," Ditto said.
The proposed plan would retain $215 million for colleges and universities; restore almost $90 million in state support for K-12 schools which would include family resource and youth service centers, preschool and after-school programs, gifted classes, dropout prevention, textbook purchases, as well as professional development; and also offer $33 million for "Work Ready" scholarships geared toward helping high school seniors be able to attend a community college or technical school without owing tuition, writes Brad Bowman for The State Journal.
The plan would also fully fund the annual recommended contributions for state workers in the Kentucky Retirement Systems, in addition to close to $90 million extra for teachers in the state.
"This is long overdue," Rep. David Watkins, D-Henderson, said of the more than $1 billion in new money budgeted for KTRS, which has only 42 percent of the assets it's expected to need to pay its future benefits. "Our teachers deserve a lot better than what we've been giving them."