A nonprofit publication of the Kentucky Center for Public Service Journalism

Mike Denham: Action to eliminate public pension liabilities top item on legislative agenda

The biggest responsibility the governor and the General Assembly have during legislative sessions in even-numbered years is enacting a budget to run state government. It sets our priorities in a way no other law can.

The budget process actually began months ago, when agencies compiled their projected needs while the state’s economists, known as the Consensus Forecasting Group, determined exactly how much the state could appropriate.

Governors formally kick off the budget process in the latter part of January, when they present their proposed spending plan to legislators. Governor Bevin gave the first one of his administration to legislators on Tuesday last week.

If you count every single dollar in the budget – a figure that includes both state and federal taxes as well as restricted funds like college tuition that cannot be moved to other programs – the combined two-year total comes to about $70 billion.

Most of the governor’s and General Assembly’s attention centers on what we call the “General Fund” and the “Road Fund.” These are mostly state dollars that essentially drive the rest.

The General Fund is nearing $11 billion a year, and about 90 percent of that goes to just three areas: education, health and human services and criminal justice. As the name implies, the Road Fund is used to maintain and expand our transportation system and totals about $1.4 billion annually.

Over the past eight years, the state has been in the same boat as the rest of the nation, having to cut back considerably because of the Great Recession. For Kentucky, the total reduction reached about $1.6 billion.

While the state has started seeing moderate growth over the last few years – a trend the Consensus Forecasting Group says is expected to continue over the next two fiscal years – we do face significant liabilities within our public pension systems for state and local government workers, teachers and their retirees.

This is not a short-term problem, but it does require action soon to avoid a potentially catastrophic situation a decade or two from now.

In an attempt to bring that liability down, Gov. Bevin’s budget calls for steep cuts, beginning almost immediately but with some key exceptions. Those areas he proposes to exempt from a nine percent drawback include classrooms, Department of Veterans Affairs, Medicaid and new drug-treatment programs authorized under last year’s law targeting the state’s heroin epidemic.

In his budget address, he said he would let his cabinet secretaries, and our public colleges and universities, decide how best to meet the reductions, so the full impact of this decision is not known. It is important to note that some agencies have already seen their budgets reduced by about a third over the past eight years.

There is some legal question whether steep cuts can be made immediately, but House leaders indicated they would let Gov. Bevin’s recommendation stand if he believes state government can absorb this reduction in the upcoming budget cycle without harming critical services.

Some of the initiatives in his budget should draw near-unanimous support. That includes reducing the workload on social workers; adding more money to eliminate the backlog of untested rape kits; boosting salaries for Kentucky State Police troopers and correctional officers; and putting more focus on repairing and expanding many of our bridges. Providing more money for workforce development, and dedicating more lottery money to education, should also see strong backing by legislators.

Now that the House has the budget in hand, our Appropriations and Revenue Committee and its seven subcommittees will review the document in-depth, and a vote by the full chamber is expected by early March. The Senate will then follow a similar path, at which point legislative leaders will hammer out a final compromise in late March that, once passed, will then go back to the governor for any potential vetoes.

After the General Assembly considers those, should there be any, the budget will then become law and take effect on July 1.

Although that issue was the most widely discussed topic in the General Assembly last week, the House did take action on a separate matter when on Thursday it approved legislation that would allow women seeking an abortion to use video-conferencing technology when talking face-to-face with their physician.

Current law has long required meetings a day before, but court rulings have allowed this to include recorded messages. Under this change, face-to-face meetings either in person or through such means as telehealth would be required. This will now go back to the state Senate for consideration.

On Friday, the House approved a bill that would add paramedics, EMTs and other first responders to the program that currently provides an $80,000 state death benefit for firefighters and police officers who are killed in the line of duty. If the bill becomes law, the spouse and children of those newly added emergency workers would also see their tuition waived at our public postsecondary schools, and this would apply as well if the worker became permanently and totally disabled while on the job.

As we learn more about the details of the governor’s budget, and move forward with many other potential changes in the law, I would like to hear your thoughts or concerns. This input is critical as the House looks for ways to better meet our short- and long-term needs.

Should you want to write, my address is Room 329E, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601; or you can email me at Mike.Denham@lrc.ky.gov.

To leave a message for me or for any legislator by phone, please call 800-372-7181. For those with a hearing impairment, the number is 800-896-0305.

I hope to hear from you soon.


State Rep. Mike Denham is a Democrat from Maysville and has represented House District 70 (Bracken, Fleming and Mason counties) since 2001.

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