In his eighth and final State of the Commonwealth address before state legislators Wednesday night, Gov. Steve Beshear praised the rise of Kentucky’s economy out of the Great Recession during his two terms, touting the state as “a national example of leadership and success” in health care reform, education and job growth.
Beshear highlighted Kentucky’s job growth, as the unemployment rate has fallen from nearly 11 percent during from the bottom of the Great Recession to 6 percent, citing economic rankings in which the state has surpassed its neighbors.
“Those critics who are always saying we need to be more like Tennessee or Indiana should realize that Tennessee, Indiana and the rest of our neighbors are working hard to be more like Kentucky,” said Beshear.
The largest portion of the speech was devoted to praising the state’s implementation of federal health care reform, with Beshear noting that Kentucky was the only Southern state to both create its own health benefit exchange and expand Medicaid, which has led to coverage for over half a million people and one of the largest decreases in the uninsured rate in the country.
“Some told me to reject the Affordable Care Act,” said Beshear. “The president was too unpopular in Kentucky, they said. Embracing federal health care reform was just too politically risky. Well, I decided that the health of our people was more important than partisan politics.”
That line received perhaps the loudest standing ovation of the night, albeit from only half of the bipartisan room. Addressing the concerns of those who remained in their seats — particularly the Republican worry that Kentucky cannot afford the expansion of Medicaid once it must kick in 10 percent of the costs in future years — Beshear added that 5,300 jobs have been created in the core health-services field over the past year and hospitals’ Medicaid reimbursements have risen by over $450 million. He also revealed that he hired an accounting firm to examine the budgetary effects of the Medicaid expansion, the results of which will be released soon.
Beshear also praised education reforms over his two terms, such as raising the high school dropout age to 18, as well as becoming the first state in the country to adopt Common Core standards and the second to adopt Next Generation Science Standards.
As for the coming session of the Kentucky General Assembly, Beshear highlighted four initiatives that have come close to passing in recent sessions: 1) Heroin legislation that would expand access to treatment and enhance penalties for traffickers, 2) new domestic violence protections for those in dating relationships, 3) a statewide smoking ban for public places, 4) and legislation allowing public-private partnerships for transportation projects.
Beshear also devoted one line to the LIFT initiative — amending the state constitution to give local governments the power to increase their sales tax and direct those funds to a specific project — saying local governments should have the option of this tool for investments.
The governor stressed the need for bipartisan cooperation within state government — and eschewing “Twitter-feed rhetoric” — while touting a few examples of the successful accomplishments they have made working across party lines. Though Kentucky’s public pension system remains among the most troubled and underfunded in the country, Beshear singled out their bipartisan 2013 public pension reform, saying it has put the system “on the path to stability” that will work “if we don’t neglect it or negate it.” Since the passage of that law, the state non-hazardous employee plan (KERS) in Kentucky Retirement Systems has become the worst-funded public pension plan in the country, and the Kentucky Teacher Retirement System is on pace to become the worst-funded teacher plan in the country this year.
Absent from Beshear’s address were some of his notable points of emphasis from past speeches, such as attacks against the Environmental Protection Agency for hurting the coal industry, or a call for expanded gaming.
In a joint press conference after Beshear’s speech, Democratic Speaker of the House Greg Stumbo and Republican Senate President Robert Stivers both expressed optimism that heroin legislation would pass this session. Despite his vocal opposition last year to legislation expanding domestic violence protective orders to dating partners — it has stalled in the Senate over the last two sessions — Stivers believed it would pass this year.
Asked if Kynect has been as much of a success as Beshear portrayed it, Stivers said he is concerned that the economic impact study by PricewaterhouseCoopers dramatically underestimated the amount of people who would sign up for the Medicaid expansion. Stivers said it might cost to state up to $300 million each year to cover their costs once Kentucky picks up 10 percent of the tab in 2020, and therefore the optimistic numbers Beshear cites from PwC should no longer be trusted.
Both legislators praised Beshear for his work on the 2013 pension reform, with Stivers saying all legislators are “committed to making sure that our commitments to state employees, CERS, (KERS) and KTRS are met, now and in the future.” Stumbo chimed in with “And I would second that. We’re not going to let those systems fail.”
Stumbo also revealed he is almost finished drafting a bill (of which he will be the lead sponsor) to provide bond funding for KTRS, a concept that the pension plan’s leadership recently endorsed as necessary.
“I personally think that it is a viable concept,” said Stumbo. “I think the window of opportunity is short, though. If the interest rate increases, it means that the viability of that type of proposal, its chances of success, go down. But I think its worthy of debate.”
As for Beshear’s legacy as governor — which much of his speech clearly laid out — Stivers lauded his ability “to sit down and work with people candidly and fairly” after election season was over, while Stumbo put him among the best governors that Kentucky has seen.
“He enjoys a very high level of popularity with Kentuckians, they believe in his leadership and they should,” said Stumbo. “Because I think he’s been one of the most outstanding governors that we’ve had in our state’s history.”