House proposal includes school safety funding, record education spending, and fully funded pension commitments
Frankfort, KY (March 5, 2020) – Members of the House Appropriations and Revenue Committee voted to approve the House budget proposal earlier this evening.
The House budget includes a record level of funding for education, including an increase in the per student allocation sent to schools (SEEK), monies to implement the school safety act, and an increase in postsecondary education funding. According to the bill’s sponsor, Appropriations and Revenue Chair Steven Rudy, the bill also includes a debt service ratio of 5.3 percent and a Budget Reserve Trust Fund ending balance of $392.4 million.
“Our primary mission is to make this state the best place to live and work. We know that we are a state with many needs. However, we have to balance those needs with a responsibility to the men and women who get up every day, go to work, and pay taxes.” Rudy added. “This is a responsible, well-crafted budget and the result of hundreds of meetings and hours of conversations and study.”
Education Funding
The House budget proposal includes a record level of per student education funding, with $4,061 in FY 21 and $4,112 in FY 22. All certified and classified school district staff will receive a one percent salary increase, paid through SEEK funds. Education funding also includes $1.13 billion over the biennium to fully fund the Teacher’s Retirement System’s actuarial required contribution (ARC). An additional $61.7 million is committed in FY 21 to cover health insurance premiums for post-2010 retirees and FY 22 costs are covered by trust assets.
Postsecondary Education
The House proposal includes $26 million in additional funding for our postsecondary institutions, $16 million of which will be invested through the Performance Based Funding Mechanism. Performance-Based Funding has proven to be an effective method of ensuring that higher education institutions continue to focus on educating students for successful career paths.
School Safety Funding
HB 352 HCS includes the first step in funding the school safety programs called for by the School Safety Act (SB 1/2019 RS) through the School Facility Construction Commission, rather than bond funding. The measure adds $18.7 million over the biennium to fund school districts’ “hard costs” to implement the requirements of SB 1, as well as an additional $2.9 million transfer from Restricted Funds in FY 21. The House also included $18.75 million in FY 21 and $30 million in FY 22 to help school districts hire new guidance counselors to meet the goals of the School Safety Act.
General Government
All state employees will receive a one percent annual increase in wages in both fiscal years, including constitutional officers. The House budget also provides restricted funds support of $4.8 million for vacant nursing positions in the Kentucky Department of Veterans Affairs. The proposal also increases support for the Local Government Economic Development fund from zero percent to 70 percent of coal receipts, which equals approximately $23 million.
Pension
The House budget proposal fully funds the state’s pension contributions in both fiscal years. For the second budget in a row, legislators are not contributing to the legislative retirement plan, which remains financially stable.
Debt Service and Budget Reserve Trust Fund
The budget proposal approved by the House Appropriations and Revenue Committee includes a debt service ratio of 5.3 percent. Also, the ending balance of the Budget Reserve Trust Fund will be $392.4 million, more than $76 million more than the original proposal issued by the Governor in January.
“This committee, under the leadership of Chairman Rudy and its subcommittee chairs, should be commended for the work they have done. This budget is a responsible spending plan that not only meets today’s needs but helps prepare us for tomorrow’s opportunities,” Speaker David Osborne added. “Every dollar spent is an investment in moving our state forward.”
The full House is expected to vote on the proposal tomorrow. Once approved, it will be sent to the Senate for that legislative chamber’s consideration. The Kentucky General Assembly has until April 15 to finish the budget and other legislative work, but members expect to send the budget to Governor Beshear by April 1 in order to ensure adequate time for review and, if necessary, to override any vetoes the Governor might issue on the document.
Information about HB 352 HCS can be found on the Legislative Research Commission’s website at www.legislature.ky.gov, or by clicking here and opening the “Current” document. (Please note, it may take some time for the LRC to upload the committee substitute).