For Immediate Release
April 6, 2018
SENATOR DAVID GIVENS’ LEGISLATIVE UPDATE
After a productive 58th day of the 2018 Legislative Session that saw the passing of several significant bills to benefit the Commonwealth, we have now entered a 10-day “veto recess” where Governor Matt Bevin will have the opportunity to sign and veto bills passed by the Kentucky General Assembly. The most significant measures to pass on Monday, April 2, were a budget and a revenue bill that will dictate how our state collects and appropriates funding for the next two years.
Some of the budget highlights included historical funding levels for state education, including record-high SEEK per-pupil funding, in addition to funding SEEK transportation at historic levels. All the charter school funding language was also removed from the budget. We fully funded the Department of Veterans Affairs and the State Police and shored up our state’s pension systems, including the Teachers’ Retirement System, by fully funding them. This bill also ensures that retired teachers will see no health care premium increases or coverage decreases. Lastly, there are raises for our social workers who are on the front lines of taking care of our state’s most vulnerable.
Kentucky’s ailing pension systems have commanded significant funding increases in recent years and in order to honor our commitment to our retirement systems, we needed to come up with some added revenue to protect other vital government entities from funding reductions. Our approach decreased Kentucky’s tax income rate while broadening the tax base, a shift to a more consumption-based tax system which relies more on spending habits. This allows Kentuckians to keep more of their hard-earned income.
People have expressed concern to me that HB 366, the state’s revenue bill that also includes tax reform, raises the income tax on Kentucky’s most vulnerable. This is simply not the case. This proposal creates a flat income tax of five percent. If you make less than 133 percent of the poverty level (roughly around $18,000 or less) you are exempt from paying income taxes. If you make between $18,000-$75,000, your tax income tax rate will be lowered from 5.8 percent to five percent, keeping more money in the pockets of hard-working Kentuckians.
These are just a few of the biennium budget highlights, but ultimately our focus remained on fully funding education, providing for our public protectors, and ensuring our pension systems are fully funded. In our budget bill, we dedicated approximately $3.3 billion in funding, nearly 14 percent of the total budget, to help fund these ailing pension systems. We made a promise to our state employees, and these two bills help us keep that promise.
In addition to passing the Commonwealth’s budget and revenue bills, we passed a number of other measures this week. House Bill 1 is a comprehensive overhaul of Kentucky’s foster care and adoption system. More than 8,600 Kentucky children are now in foster care and awaiting permanent homes, and the need for such reform has been obvious for a long time. House Bill 1 includes major provisions that would expand the definition of blood relative for child placement.
The legislation would also require more case reviews for each child in foster care, create a “putative father registry” so that a child’s possible (but not verified) biological father can be notified of the child’s prospective adoption, and allow the state to seek termination of parental rights for new mothers who will not seek drug treatment after giving birth to a drug-addicted baby.
Senate changes to HB 1 that made it into the final bill include provisions that would protect a mother from losing her parental rights if she was properly prescribed and using medication that could have caused her newborn’s addiction. The amended bill would also clarify that foster parents and child placement agencies be given a 10-day notice before a foster child is reunited with his or her birth parents or placed in a new home.
Senate Bill 5 was also given final passage this week. This bill levels the playing field for small-town, locally-owned pharmacies. Senate Bill 5, as amended by the House, would make the Kentucky Department for Medicaid Services in charge of setting the reimbursement rates for a pharmacist. The rate is currently set by pharmacy-benefit managers (PBMs) hired by the state’s Medicaid managed-care organizations (MCOs). Kentucky Medicaid spends $1.7 billion annually on prescriptions and SB 5 would help authorities track that money and determine whether locally-owned pharmacies were being reimbursed fairly.
We also passed House Bill 362, which allows for the phase-in of increased pension costs for local governments. Recently, the Kentucky Retirement Systems Board adjusted their assumptions to require cities, counties, and other quasi-governmental entities to increase their pension contributions. If those increased pension contribution costs were not phased in over time, several of these local governments would be at risk of bankruptcy.
Passage of major pension reform legislation in recent weeks allowed us to justify the decision to allow counties and cities to phase-in these costly pension contributions, which was the language passed in House Bill 362. While this measure represented a win for local governments and quasi-governmental entities, it reiterated the need for raising revenue through tax reform, as we did in House Bill 366.
There are only two days left in the 2018 Regular Session. We will reconvene for those final two days on Friday, April 13, and Saturday, April 14. Kentucky’s constitution requires the General Assembly to be adjourned by April 15, and since April 15 is a Sunday and we cannot constitutionally meet that day, we must finish the state’s business by midnight on April 14. It has been an honor to represent you and our district in Frankfort, and I thank you for engaging in the legislative process.
If you have any questions or comments about these issues or any other public policy issue, please call me toll-free at 1-800-372-7181. You can also review the Legislature’s work online at www.lrc.ky.gov.
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Note: Senator David Givens (R-Greensburg) represents the 9th District including Allen, Barren, Green, Metcalfe, Monroe and Simpson Counties. He serves as a member of the Appropriations and Revenue Committee, the Agriculture Committee, the Education Committee, the Enrollment Committee, and the Health and Welfare Committee. For a high-resolution .jpeg of Senator Givens, please log onto http://www.lrc.ky.gov/pubinfo/portraits/senate09.jpg.