Update for District 50: House Passes Federal Spending Plan and Transportation Budget

By CHAD MCCOY
State Representative for the 50th District

Monday, January 24, 2022 – In an extraordinary move aimed at giving us enough time to consider tax modernization, I joined other members of the House in voting 85 to 8 on a budget proposal to fund our state agencies, Programs and Services. The version of the bill that we approved includes record funding for education, a continued commitment to the state budget reserve trust fund, and salary increases for the Kentucky State Police, state employees, social workers and educators.

REP. Chad McCoy

In total, HB 1 HCS includes $100 billion in financing from general, restricted and federal dollars. While much of the money we allocate must go to specific categories, we have the flexibility to invest the more than $25.6 billion in General Fund money. Of the $25.6 billion in General Fund appropriations that we have invested over the two years of our budget, more than $10.7 billion (41%) goes to kindergarten through 12th grade public schools Education. While the bill does not provide for a salary increase for educators, our goal was to provide additional funds to allow local school boards to increase salaries for their staff as they see fit.

Overall, the budget represents an additional estimated $1.8 million for Nelson County Public Schools and $1.4 million for Bardstown Independent Schools in the first year alone.

These include a significant increase in funding per student (SEEK), funding the entire cost of daycare, assistance with transportation costs, and $24 million in additional funding for our Family Resource and Youth Services Centers (FRYSCs).

HB 1 HCS also includes an increase in funding for our public universities and technical schools. The measure provides just over $1.7 billion for the same two-year period. Specifically, $50 million is allocated annually to the performance-based funding model used by the University of Kentucky, University of Louisville, Western Kentucky University, Murray State University, Northern Kentucky University, Morehead State University and the Kentucky Community and Technical colleges is available.

I’m happy to share that it also includes $20 million of the budget each year for a new healthcare workforce initiative. HB 1 HCS also increases an existing allocation by $42 million each year for anticipated growth each year for the College Access Program (CAP), Kentucky Tuition Grant Program and Work Ready Scholarship Program.

The proposed budget also aims to improve the performance of our nation’s health and welfare programs to make them more effective and efficient. While Kentucky ranks low in child welfare, the cabinet is struggling to find and retain qualified social workers. HB 1 HCS raises pay and introduces a deductible for social workers, a $25.6 million increase in year one and a $61.7 million increase in year two. It also funds one hundred additional social worker posts each fiscal year, for a total of 200. To be accountable, the bill requires that the implementation of staffing increases be tracked and reported. The bill also increases the reimbursement rate for 1915c waiver benefits by 10 percent per year. The bill also provides for a pilot program to offer an expansion of the mobile crisis response service to provide mental health services in rural Kentucky. Additionally, the budget includes $7.2 million in additional General Fund dollars in fiscal one and $14.4 million in General Fund dollars in fiscal two to expand the senior meal program.

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

This budget also provides more Kentucky residents with safe drinking water, provides employees with competitive salaries, and ends the wasteful practice of borrowing money for minor maintenance and repair projects and capital projects costing less than $3 million. All government employees will receive a 6% pay rise in FY22-23. However, since the state has not updated its staff rating and compensation plan in decades, HB 1 HCS would ask the cabinet to do so.

By growing our economy today, we can afford the progress we want tomorrow. This means identifying economic development opportunities and investing in our tourist destinations. We have committed $100 million each year to a rural product development initiative to develop business parks and have spent $56.6 million in fiscal one and $67 million in budget year two for renovations and repairs at our state parks.

Our budget once again fully funds the actuarial 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 estimated to receive $1.067 billion in year one and $1.084 billion in year two. That’s $629 million more in year one and $646 million more in year two than we are required to by law.

We also approved a transportation budget that, according to Budget Review Subcommittee Chairman Sal Santoro, “…is the beginning of the end of our state’s underfunding of transportation needs.”

HB 241 includes an operating budget of $200 million in general funds, $200 million in earmarked funds and $1.6 billion in road funds for each fiscal year. It grants $200 million for required state adjustment to the federal infrastructure package; includes $50 million each year for a special grant to help local governments with road maintenance; provides $10 million each year to a grant pool available to the state’s 52 general aviation airports.

I am particularly pleased to see that more than $180 million in allocations formerly charged to the road fund will be replaced with general fund dollars and that amount transferred to the maintenance account. For too long the state has used road fund money for non-road services. It may all be government money, but this change makes how we spend it much more transparent.

As you can see, each of these expenses adds up and it’s easy to get carried away with the expenses. After all, spending money is a lot more fun than saving it. But saving money was also a priority for us. Not only do we have more in our Budget Reserve Trust Fund than at any time in state history, but we have underspent more than $1.14 billion in projected revenue. Why? Because we are aware that this is not our money, but yours. We have aligned the budget to the needs of our state and have worked hard to maximize every single dollar we have allocated. Ultimately, what’s left offers us an opportunity to give it back to taxpayers in the form of tax modernization.

I will continue to report on the budget as it moves through the process. Keep in mind that this is the House spending plan and the Senate will no doubt make changes before it goes to the free conference committee.

I hope you will feel free to contact me in the coming weeks. You can reach me by phone at 502-564-8100, the Frankfurt toll-free message line at 1-800-372-7181, or by email at Chad.McCoy@lrc.ky.gov.

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Mike Hunter

Mike is the owner of the local pool shop. He's been in the business for over 20 years and knows everything there is to know about pools. He's always happy to help his customers with whatever they need, whether it's advice on pool maintenance or choosing the right chemicals. He's also a bit of a pool expert, and is always happy to share his knowledge with anyone who's interested.

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