Legislative Update

Over the past month the number of Kentuckians who have tested positive for COVID-19 has grown from zero to 770, the stock market has suffered record-setting plunges and unemployment numbers have skyrocketed.

In this environment, no one knows what kind of toll the pandemic will ultimately take on the economy.

Lawmakers acknowledged as much on Wednesday as they approved an austere state budget. Although state budgets typically outline spending for a two-year cycle, the plan produced this week covers only one year. Lawmakers said they were reluctant to make revenue projections too far into the future at a time of so much uncertainty.

In passing a one-year spending plan, they set the stage for a return to budget-making in next-year’s legislative session, if they aren’t called into a special session before then, to make any needed revisions to the spending plan for the upcoming fiscal year while also starting from scratch on a budget for the following fiscal year.

Lawmakers reset their sights from what was widely envisioned earlier this year when earlier drafts of the budget proposal outlined increased school funding as well as pay raises for teachers and state employees. Those plans have been deferred. The budget is now based on the most pessimistic projections the state’s budget forecasters provided in December, though even those projections are expected to fall short of accounting for the toll the pandemic is taking.

The $11.3 billion spending plan approved on Wednesday keeps steady the basic per-pupil funding for Kentucky schools and supports safety measures envisioned when lawmakers approved a major school safety bill last year. It also provides the full actuarial-recommended level of funding for state public pension systems.

The budget is programmed to end the fiscal year with $303 million in the state’s Rainy Day Fund, though lawmakers acknowledge that fund will likely be used as a “shock absorber” if revenue estimates aren’t met as full effect of the economic downturn is realized.

On the same day the budget was passed, lawmakers approved a revenue package that includes a new tax on vaping products that is expected to generate $25 million over the next two years.

Lawmakers have now returned to their home districts for a veto recess, a period of time that gives them a chance to see whether the governor vetoes any legislation before his time to do so runs out. The General Assembly will reconvene on April 13 to consider overriding any vetoes. Final adjournment for this year’s legislative session is scheduled for April 15, the last day allowed by the state constitution.

To offer feedback to lawmakers on the issues confronting Kentucky, call the General Assembly’s toll-free message line at 1-800-372-7181.

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Sean Hammond is the host of "Sean at Dawn Monday thru Friday from 5:00 to 9:00 am and a contributor to lakercountry.com.