Smith: Budget talks continue in legislative week

Brandon Smith State Senator, District 30

March 31, 2014

This week, I welcomed the family of Effie M. Couch to the Senate floor in honor of a resolution I filed urging the Transportation Cabinet to designate the bridge on United States Highway 421 in Leslie County as the “Effie M. Couch Memorial Bridge.” Ms. Couch was a special member of our community, as well as a long-serving clerk. She had a profound effect on many she knew. I want to thank Shanna Couch Holiday, James Douglas Couch and Kristi Couch-Caldwell and her son Alexander for joining me to celebrate their grandmother and great-grandmother. I also welcomed Johnson County Middle School’s academic team, who recently won the Governor’s Cup. This is a stellar group of students who have a history of winning competitions and represent the strong Johnson County school system well.

This was a critical week as we hashed out state budget details with the House in conference committee. We are currently reviewing Executive, Judicial and Legislative Budgets for the next two years, as well as the state’s road plan. There are many different opinions and philosophies on how to spend the money, raise revenue and support the important public services for Kentucky.

Our priorities include creating a budget of austerity, fiscal responsibility and fulfillment of our obligation to provide the necessary services while respecting the taxpayers of Kentucky.

The main items we changed in the House’s budget bill were adjustments that reduced our borrowing, reduced the bonding and used money more efficiently and wisely. We lowered the debt service ratio from their 7.05 percent to 6.26 percent. Also, we increased the reserve trust fund to $125 million. We also reduced the structural imbalance from the proposed $231 million to $153 million. We also took out the 1.5 cent gas tax hike that the House proposed in their revenue bill.

Education is a key piece of our budget, and always high on the list of priorities. The House’s budget had appropriated $50 million in school technology bonds to fund devices for schools. This means that Kentucky would pay 10 years on equipment that had an average life of three to four years. We did not agree with this method; however, we know updated technology is essential for our students and classrooms. So, we found a better way to fund this initiative. We can provide the equipment, expand the bandwidth for classrooms and implement a statewide Information Technology Academy program with an investment of $6.6 million. This plan uses a federal E-rate program that will pay for 80 percent of the bandwidth investment, and also can be used for devices for classrooms.

Another big ticket item is healthcare. This year, as the Obamacare program was implemented, the state’s obligations to provide healthcare to uninsured people changed. Under our budget plan, no state funds can be used for Obamacare because the federal government is committed to its funding. If those commitments change, we can opt out. We also redirected the funds of the Quality and Charity Care Trust for the University of Louisville. Obamacare is the ultimate social net, and if it is working as proponents claim, the additional money is not necessary and can be spent in another area of need.

Though we had differences of borrowing limits and indebtedness, there were several aspects of the House’s budget with which we concurred. We agreed to fully fund the actuarially required contribution of both the Kentucky Employee Retirement System and the Kentucky State Police Retirement System. We also agreed with the raises for state employees for 2015 and 2016. These are two items I heard about from many of you, and want to reassure you I heard your comments and am committed to give these hard working citizens the security they deserve. Our teachers and state workers are the foundation for our children’s futures and the backbone of our communities. It is right that we afford them the living they earn, and in doing so, job security here at home.

The budget bill is an all-encompassing document that cannot be explained in a few paragraphs, but these are the high points. I do want to point out another major savings we wrote into the budget; to authorize $270 million in agency bonds as opposed to the House’s proposed $974 million.

Work continues in the conference committee, on which I serve, and changes will be made, but we will work hard to preserve fiscal accountability, which our constituents deserve

As legislation continues, I appreciate your comments and input. Please leave a message for me through the Legislative Research Commission’s toll-free message line at 1-800-372-7181. Also, you can follow the work of the General Assembly at www.lrc.ky.gov. In addition, you can see activity of our caucus via twitter at @kysenategop.