2016 Legislature…Budget Update, Senate Version

2016 Legislature…Budget Update, Senate Version

Senate Passes Budget

After 54 legislative days, all three versions of the state’s next two-year spending plan have been revealed. The Senate passed its version of the budget yesterday, just a week after the House. Here are the key provisions and differences with the Governor’s and House budgets:

  • Budget Cuts – The Senate kept most all of the Governor’s proposed cuts to state government at 4.5% current year and 9% in FY17 and FY18. They maintained similar exemptions from the cuts as the Governor’s budget: K-12 funding, Medicaid, and Veterans. The House had maintained similar cuts, but exempted higher education and some education support areas (preschool, KET, etc.) from the budget cuts.
  • Pension Funding -The number one issue facing the Commonwealth in the minds of policymakers in Frankfort is the state’s poorly funded public employee pension plans. The Senate stayed on the same path as the Governor and House by contributing significant dollars to both KRS and KTRS. The Senate budget would contribute $1.195 billion compared to $1.123 billion (House) and $845.5 million (Governor).
  • Education/Workforce Development – This is a key area for KAM and certainly is addressed in a multi-faceted way in the budget. Here is a brief rundown:
    • Postsecondary Funding – The Senate followed the Governor’s approach and maintained the proposed 9% cuts in FY17 and FY18 for postsecondary institutions. The Senate adopted a similar position to the Governor in regard to performance funding for postsecondary. Beginning in FY 18, 25% of university funding would be subject to performance funding. The Senate went a step further, defining the outcome metrics universities will be judged on, like: degrees produced, graduation rates, closing achievement gaps, and types of degrees.
    • Workforce Development Bonding – The Governor proposed a $100 million bond pool for workforce development projects like IT and advanced manufacturing training centers. The House took those bond funds out. The Senate returned to the Governor’s approach, but only included $50 million in bonding.
    • Workforce Scholarships – All three proposed budgets set aside all lottery proceeds for education, but dedicated those to different programs. The Governor created a new workforce development scholarship fund. The House dedicated the funds to existing need-based aid programs, KAP & KTG. The House additionally funded those and replaced their Work Ready scholarships to provide free community college tuition. The Senate went with a different approach, dedicating the funds for KEES scholarships to be used on dual-credit courses.

Lawmakers are looking to finish their work on the budget by next Tuesday, the 58th legislative day, to preserve their ability to override any gubernatorial vetoes.

Keeping You Informed

As in past years, we will continue to communicate with you weekly with bill tracking lists (click HERE to download current bill list), summaries of legislative actions and dynamics, and specific bills of interest. We will also, of course, contact you immediately as issues of particular interest or concern arise. Don’t forget to schedule time for our KAM Conversation Conference Calls, which will take place on Thursdays, at 4:00 EST, throughout the Legislative Session.  We invite KAM Members to call and take part in this dialog each week.

Calendar & Key Dates

You can access the session calendar HERE. Please keep in mind that this calendar can change if the legislature decides to shift days. We will let you know if that happens; however they must adjourn by April 15, according to the Constitution. Below are specific dates of interest.

March 28 and 29 – Concurrence Only

March 30-April 9 – Veto Recess

April 12 – Sine Die

Meet the KAM Governmental Affairs Team here.

Your One-Stop Source For KAM Information: www.KAM.us.com

Don’t know who your elected representatives are? Click here to reach the Action Center of the Kentucky Prosperity Project to find this and other important information to help you make your opinion heard on matters affecting you and your business!

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