EKU GOV Weekly Report: Legislative Days 6 - 9
The General Assembly reconvened on Tuesday for Part II of the 2017 Regular Session. Over the past month, legislators relocated to new offices, were placed with administrative staff, and prepared for a flood of bill filings. Recognizing both the speed with which legislation has passed this year and the short time-frame remaining this session, visitors packed the Capitol this week. Committee agendas were full, but relatively few bills passed off the floor. The Senate sent four Senate Bills to the House, and the House moved three House Bills to the Senate. Among those that passed were SB2, which adds transparency and governance measures to the state pension system, and SB50, which would give local school districts more flexibility in moving their start dates past Labor Day.
The Governor gave his second State of the Commonwealth Address Wednesday night in a non-scripted speech lasting nearly an hour. In the address, Bevin asserted that Kentucky would become the model for foster care and adoption; he stressed that the state would be inhospitable to deadbeat dads; charter schools and performance-based funding for higher education would become a reality, and; he repeated that Kentucky will become the manufacturing and engineering hub of the United States. The Governor’s assessment of the scope of the state pension problem and subsequent steps to address that grabbed the headlines. He asserted that the state’s pension problem is greater than $80 billion (based on an assumed rate of return pegged to the 30-year U.S. Treasury rate), noting that the state could apply every dollar of revenue to the problem for eight years before the state reaches the top of the hole.
Facing the pressure of a monumental pension liability, the Governor advocated for tax reform that will remove all of the “sacred cows” (tax loopholes) out of the barn. Some will move back into the barn, and others will be turned into “hamburger meat.” Ending the inventory tax and the death tax were specific focuses of Bevin’s remarks. Legislative leaders have consistently framed the tax reform debate in terms of growing the proverbial pie: more taxpayers at the same rates will drive additional revenues over time. Perhaps not surprisingly, lawmakers on both sides of the aisle pushed back on the concept of tax reform that increases revenue. Both House Speaker Hoover and Senate President Stivers said tax increases would be problematic for their membership and thus for constituents. House Democrats who have traditionally supported some tax increases expressed concern that a Bevin tax proposal would shift the burden from corporations to the middle class. Setting the stage for the debate to come, Bevin advised the legislature to, “Think big, be bold. This is what you were elected to do, this is what the people want of us.”
There was no legislative action on the high-profile issues of medical review panels (SB4), charter schools, education reform (SB1), and university board appointments (SB107) which will certainly change as this short session creeps toward adjournment. President Stivers and Speaker Hoover were asked about the prospect of shortening the session in an interview following the State of the Commonwealth address. Both agreed that while the session has already been incredibly successful, it would be inappropriate to announce an early Sine Die date with so many other issues pending.
On Friday afternoon Senator David Givens filed the much anticipated performance funding bill (SB 153). The bill holds mostly true to the recommendations from the performance funding working group. Key implications for EKU include the consolidation of the four-year universities into one sector, a weighted degree production model that gives a premium to the research institutions and a model that could move 100% of all state funding for higher education into a performance funding pool. Additional analysis will be provided once the bill is completely reviewed by our policy review team.
REAL-TIME EKU BILL TRACKING: Click the image below to view bills we are tracking.
Published on February 14, 2017