House approves budget, revenue plan; bills now head to Senate

FRANKFORT, Ky. (WKYT) - The House passed its revenue and budget bills by large margins on Thursday, sending those measures to the Senate for consideration.

The revenue bill creates a new opioid tax and raises the cigarette tax, while the executive budget bill reverses many of the cuts Governor Matt Bevin had proposed in his plan. It also fully funds the state's pension obligations. (You can read more about the House's budget plan here.)

"It's not perfect," said Rep. Steven Rudy, R-Paducah, who chairs the House Appropriations and Revenue Committee and headed the budgeting process. "But it does fully fund the actuarially required contribution for the first time in a long time."

That got a standing ovation from many lawmakers in the House chamber, who praised the bill for its commitment to education.

Some lawmakers criticized other parts of the plan, though, mainly for what is missing.

"You're saying, 'Well, this is a vote for education.' Lord knows, as a person who's come out of education, I'm supporting education and I try to support education each and every time," said Rep. Derrick Graham, D-Frankfort. "But what really galls me is that we're taking funding for the health care of our public employees to try to balance this budget and to direct it somewhere else."

The House Republican plan includes taking $742 million earmarked for specific purposes throughout state government and transferring it to the General Fund, which pays for most of state government, the Lexington Herald-Leader reported Thursday. The largest transfer is $466.5 million over the next two years from the Kentucky Employees' Health Plan.

The budget bill reverses proposed cuts to schools, colleges and universities, Veterans' Affairs, and Kentucky State Police, but most other agencies will still receive a 6.25 percent cut in funding.

"We need to be very cautious about recognizing how wonderful this budget is in sparing certain aspects of government from some more cuts," said Rep. Jim Wayne, D-Louisville, who was critical of the budget and revenue bills during Wednesday's committee hearing.

He went on to list programs he wanted to see funded, including more money going to mental health services.

"This budget puts absolutely zero additional operating money into our community mental health systems," Rep. Wayne said. "That wouldn't be so bad if it's just for one year. But ladies and gentlemen, we have consistently, since 1999, failed to put additional operating dollars into our community mental health systems."

The budget bill restores funding to Kentucky Mesonet, the state's poison control center, the Robinson Scholars Program, property valuation administrators' offices, and the Family Resource and Youth Services Center - all of which saw cuts in the governor's proposal, which eliminated a total of 70 programs.

Still, some cuts remain. The bill does not fund the University Press of Kentucky or the Commission on Women, among many other programs.

"I voted yes," said Rep. Linda Belcher, D-Shepherdsville, who was just sworn in earlier this week after winning her seat in a special election. "I didn't want to. Because I feel like there's so many things that have been left out that we actually need to get money for."

Belcher said she hopes to see changes to the budget if tax reform passes and can bring in more money to the state.

The revenue bill passed 68-25. The executive budget bill passed 76-15. The House also easily passed the judicial and legislative branch budgets.

All four bills now go to the Senate for consideration.

Senate President Robert Stivers, R-Manchester, told reporters on Thursday that he and the other leaders and staff are still looking over the bills.

Stivers said he would not rule out the new opioid tax and increased cigarette tax - measures that Rep. Rudy acknowledged he did not know whether or not the Senate would approve - but Stivers said he would want to see that as part of comprehensive tax reform.

He also said he wants to discuss those measures with House leaders to see their reasoning behind it. Generally, he said raising the cigarette tax might be good health care policy in discouraging people to smoke, but it is not good tax policy - because if it is being done to raise revenue, those are numbers that will dwindle as time goes on, Stivers said.

"Anything is on the table," said Sen. Stivers. "But it has to be done in a way that it's good, sound, fiscal taxing policy that doesn't inhibit business, that increases expansion of the base, at a rate that will be necessary to cover the expenses of the commonwealth."

You can read more about all three budget bills and the revenue bill here.

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