Ky. House GOP budget plan reverses many major cuts

FRANKFORT, Ky. (WKYT) - House Republicans unveiled on Wednesday their revenue and budget bills - their plan to fund state government, agencies and services for the next two years. And it is much different than the governor's proposal a month ago.

Lawmakers discussed the bills at the House Appropriations and Revenue meeting on Wednesday afternoon. All of them were reported favorably out of committee and are expected to be presented on the House floor Thursday.

Rep. Steven Rudy, R-Paducah, chairman of the House Appropriations and Revenue Committee, said lawmakers know that fully funding state pensions is expensive, and they need to boost revenue. So their revenue bill, House Bill 366, tries to do that.

It eliminates a $10/person state income tax credit, creates a 25-cent/dose tax on opioid distributors selling to pharmacies, and raises the cigarette tax by 50 cents.

"This is a serious approach to addressing some serious problems," Rep. Rudy said. "We hope that people will continue to reduce smoking, and we hope that pain pills will quit being dumped into this state at the level that they are."

Kentucky would be the first state to tax opioid doses like this, Rep. Rudy said, but he was unsure if the Senate is open to it. He said if distribution companies pass the cost onto patients, then the attorney general can take action against the companies.

The bill also suspends the state's film tax credit program, a move that Gov. Matt Bevin included in his budget proposal in January.

House Republicans called HB 366 a "placeholder," saying they are committed to taking up tax reform before the session ends as a way to increase revenue coming into the state.

Lawmakers passed the bill in the Kentucky House Thursday by nearly a 3-to-1 margin Thursday.

Their executive branch budget bill, House Bill 200, differs greatly from Gov. Bevin's proposal. In fact, lawmakers took steps to reverse many of the governor's proposed cuts.

In January Gov. Bevin proposed 6.25 percent spending cuts across the board. Lawmakers said their budget provides money to restore those cuts to schools, colleges and universities, so they will not have to face those cuts.

Lawmakers on both sides of the aisle said they were glad to see the investment in education.

"Education's well-being in this state is a bipartisan effort," said Rep. Kelly Flood, D-Lexington, "and we can make this the pillar that it has been and will continue to be."

The bill also restores cuts to Veterans Affairs and Kentucky State Police, including money for KSP to get 260 cruisers, 800 rifles (to replace their current rifles from the Vietnam era) and a new radio system (in the second fiscal year), said Rep. Jason Nemes, R-Louisville.

In Gov. Bevin's budget, he proposed the elimination of 70 programs, stripping funding from Kentucky Mesonet, the state's poison control center, and the Robinson Scholars Program for first-generation students from eastern Kentucky attending college at the University of Kentucky.

HB 200 restores funding to those three programs, as well as to property valuation administrators' offices and to Family Resource and Youth Services Centers, lawmakers said.

Some cuts still remain, though. The bill does not fund the University Press of Kentucky or the Commission on Women, along with other programs.

"This budget is not perfect," Rep. Rudy said. "We have great employees throughout the commonwealth and there are several cuts throughout this budget, several programs that are being eliminated, several programs that aren't being funded."

The bill does fund House Bill 1, an adoption reform bill, and allocates $12.5 million for the recruitment and retention of social workers.

Rep. Nemes said the bill includes money for 51 new public defenders and $70 million to fund three private prisons.

The bill also fully funds the actuarially required contribution for the state's retirement systems for the first time in years, Rep. Rudy said. It also keeps retired teachers from having to pay for their health care. (The state covers the cost for the first year of the budget, but it requires KTRS, the Kentucky Teachers Retirement System, to cover the cost the second year.)

The committee also approved the judicial and legislative branch budget bills.

The judicial branch budget, House Bill 203, does not provide for salary increases. Rep. Jason Nemes said that was his No. 1 goal, but the money just was not there. He did say if the Supreme Court raises court costs, then they can fund raises for unelected judicial branch workers.

Rep. Rudy said that the legislative branch budget, House Bill 204, is in line with their current budget, just with a cut in the form of a fund transfer.

"There are no hidden raises in this bill," he said.

Rep. Jim Wayne, D-Louisville, was critical of the revenue and budget bills, calling them inadequate.

Rep. Rudy said the bills will be presented on the House floor on Thursday. The House is scheduled to convene at 2 p.m.

House Speaker Pro Tempore David Osborne, R-Prospect, told reporters on Wednesday evening that he expects the bills to pass.

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