The 2018 session of the Kentucky General Assembly drew to a close on Saturday, which was most notable for legislation implementing significant changes to the state’s public pension system — and eliciting huge protests in Frankfort from teachers who felt under attack.
Much like that pension bill, the two-year state budget bill and revenue bill altering the tax code came late in the session and passed along partisan lines, with Democrats united in opposition. While Gov. Matt Bevin signed the pension bill into law, he vetoed the budget and tax bills — which he called fiscally “irresponsible” — only to see the Republican-dominated legislature turn around and override both vetoes on Friday.
Likely frustrated by the protests and these overrides Friday evening, Bevin once again lashed out at protesting teachers for causing a number of school districts to close that day, issuing a “guarantee” that a child left home alone was sexually assaulted. The governor’s comments drew national attention and criticism, including members of his own party in the General Assembly — 45 of which sponsored a House resolution that passed Saturday condemning Bevin’s actions.
Here is a rundown of how these budget and pension bills affected Louisville institutions, in addition to other legislation passed earlier in the session and a number of bills whose fate came down to the wire in the final two days of the session.
Budget and revenue
With the General Assembly overriding Bevin’s vetoes, the 6.25 percent cut in state appropriations for higher education is now official, which will amount to roughly $8.3 million for the University of Louisville.
For Louisville Metro Government, the revenue bill institutes a mandate for the city to spend $350,000 in coal severance tax receipts it receives in each of the next two years on the Waterfront Botanical Gardens project. Mayor Greg Fischer and Councilman Bill Hollander had welcomed the tax receipts but resented the mandate, saying it undermined local control.
As for Jefferson County Public Schools and other districts throughout the state, the per-pupil SEEK formula for school districts was increased to $4,000, though funding cuts for textbooks were not restored.
The individual and corporate income tax rate was lowered to a flat 5 percent in the revenue bill, while the sales tax exemption for a number of services was lifted. Proponents of the move said this would increase revenue while attracting businesses to locate in Kentucky, while opponents called it a regressive change that would mostly benefit the wealthiest individuals in the state.
The tax on packs of cigarettes will also go up by 50 cents.
Local pension phase-in
Due to the legislature overriding Bevin’s veto of HB 362 — which caps the increase in pension costs for local governments and school boards to 12 percent over the next 10 years — Louisville Metro Government will avoid what Fischer estimated would be a $50 million hole in the city’s next budget.
Louisville, like many other cities and counties around the state, would have faced a 50 percent increase in pension costs for employees with a plan in the Kentucky Retirement Systems, because of new conservative assumptions by the KRS board.
Despite Louisville Metro Council and many local government entities across the state passing resolutions urging the General Assembly to pass legislation allowing the County Employees Retirement System to separate and become independent from KRS, the “#FreeCERS” initiative was not included in the major pension overhaul bill.
As for the larger pension overhaul that changes the way sick days can be calculated for retiree benefits and moves teachers to new hybrid plans, Republicans viewed the bill as a needed step to protect the solvency of underfunded public pension plans.
However, Attorney General Andy Beshear has filed a lawsuit to stop the law from going into effect, asserting that it not only violates the inviolable contract of workers, but the method used to pass it was illegal, as the bill’s last-second unveiling and passage did not include a required fiscal analysis or the required number of readings.
Despite warnings from the ACLU of Kentucky and the Louisville Urban League that it could lead to racial profiling, the Senate joined the House in passing a bill that would expand the legal definition of a criminal gang and increase mandatory sentences for gang members who commit crimes.
House Bill 169 was supported by Mayor Fischer, LMPD Chief Steve Conrad and the Kentucky State Police.
KentuckyWired and tax credits
The public-private partnership created to connect 3,000 miles of high-speed internet cables throughout the state appeared likely to be shut out from the $68 million it requested in this session, until legislators came through Saturday with the funding just hours before the session ended.
The funding for KentuckyWired was almost left out due to the criticism of some legislators who called it a wasteful boondoggle, but a so-called cleanup bill on Saturday restored this funding, responding to fears that breaking the state’s contractual obligations would hurt Kentucky’s credit rating and ultimately cost the state more money.
Though the angel investment tax credit program is suspended for the next two years, the cleanup bill also revamped it with a chance of restoring its funding after that period, in addition to restoring a manufacturing tax credit that is used by major employers like Ford and GE Appliances.
‘School choice’ funding and tax credits
School choice advocates made a last-second push for legislation providing a funding formula for charter schools and tax credits for private scholarships, but both came up short.
Though the Senate added an amendment to an existing bill that would give a 95 percent tax credit on donations made to organizations providing scholarships to private K-12 schools, that bill was ultimately not taken up for a vote on Saturday.
While the General Assembly allowed the creation of public charter schools in last year’s session, they declined to push through a funding formula that would allow them to receive public money in the session that just ended, putting the chances of new charters opening in the upcoming school year in doubt.
The Senate also failed to push forward legislation passed in the House that would have rolled back reimbursements for homeowners and businesses that invest in solar panel installations and sell surplus energy back to utility companies.
These utility companies spent a large amount on lobbyists to push the net metering bill through the House by a large majority, but environmentalists warned that it would kill any incentive to invest in renewable energy and lead to a significant loss of jobs in that industry.
Despite so much of the past six months taken up by the sexual harassment scandal that rocked the Republican leadership of the state House and caused former Speaker Jeff Hoover to resign from that position, legislation to put new safeguards in place could not make its way into law.
House Bill 9 would have specified how Legislative Research Commission harassment claims are reported and added sexual harassment as an offense that a legislator could be punished for. The bill easily passed the House but did not even receive a vote in the Senate.
An effort to amend the state constitution by moving the 2023 election for constitutional officers — like the governor and attorney general — to 2024 failed, after not being taken up by the House. Even if passed, the amendment would not have taken effect unless it was also approved by a statewide referendum.
House Bill 454 prohibits a common abortion procedure if a woman is more than 11 weeks pregnant, but a federal judge issued a temporary injunction on enforcement of the law last week. Hearings in that case are expected to begin this summer, and similar legislation passed in other states have been struck down in the courts.
A bill prohibiting a child under the age of 17 from being married passed midway the session, after national headlines were made when its Republican sponsor said a conservative organization was lobbying against the bill.
The bill would only allow a 17-year-old to marry if approved by a judge and the child’s family. Previously, Kentucky had no ban on child marriage, allowing a judge to approve the marriage of a minor in cases that involved a pregnancy.
After several attempts in recent session, the General Assembly passed “Marsy’s Law,” which would amend the state constitution to create a victims’ bill of rights. These rights would include a requirement to be notified by the courts when a defendant was released from custody and the ability to testify in court proceedings.
The amendment must now be approved by a statewide voter referendum before going into effect.
Despite the national movement that sprung forth after the massacre at a Parkland, Fla., high school — and shooting that killed two students at Marshall County High School in western Kentucky weeks earlier — the General Assembly did not pass any of the bills filed involving gun reform.
The General Assembly passed a bill that would increase what breweries were allowed to sell on-site from one case of beer to three, as well legislation allowing them to sell up to a case of beer to customers and at public festivals.
This story has been updated to reflect that the angel investment tax credit will be suspended for two years before its funding can return.