The Pace Quickens
The fourth week of this long, sixty-day, budget session of the Kentucky General Assembly came to a conclusion on Friday, the 18th legislative day of the session. The tempo of legislative activity significantly picked up during the week.
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Governor's Budget Proposal
Part of the increase in activity was no doubt because Governor Andy Beshear went before a joint session of the legislature on the night of January 28 and gave his budget address, the full text of which can be viewed
HERE. He touted his $24 billion biennial budget proposal as the first in fourteen years that is without General Fund cuts.
Gov. Beshear termed his proposal, filed as
HB 352, an “education first budget,” proposing 1% increases for both higher education and SEEK and restoring funding for textbooks, as well as providing for a $2,000 increase for public school teachers. Beshear proposed increased spending of $109 million on criminal justice issues over the two-year budget cycle, including nearly $40 million for a private prison in southeastern Kentucky. Beshear also continued to point to a need for criminal justice reform to reduce the number of incarcerated individuals, without offering any specific proposals. The Governor’s proposal also includes a 1% salary increase for state employees, funding for 350 additional social workers, and $35 million in bond funding for the University of Louisville purchase of Jewish Hospital.
To fund his budget, Beshear proposed revenue increases, fund transfers and what he termed other efficiencies. The revenue increases are in
HB 351 and include a proposed ten cent increase on cigarettes and other tobacco products, new taxes on vaping products, revenue from legalized sports betting contained in
HB 137 awaiting a House floor vote, as well as a proposed 29% increase in the minimum tax on limited liability entities. In total, the revenue package raises over $70 million in each year of the biennium.
The reactions of the Republican majorities of the House and Senate to Beshear’s proposals were not enthusiastic. Legislators expressed frustration over the Governor’s failure to brief them or provide a preview of the budget proposal before his address. Legislative Leaders were mostly critical of the revenue portion of his budget proposal, including reliance on fund transfers, the proposed increase in taxes on LLC’s, and the additional tobacco taxes. The revenue side of the budget is the first issue legislators have to grapple with as they begin deliberations over the budget. The House will take the next month or so to review and then make changes based on their priorities.
The Beshear administration also released its road plan this week, which was filed as
HB 354. The plan lays out an outline for highway construction and repair, but fails to include any proposals for new revenue for the stagnant road fund.
The filing of the executive branch budget and revenue proposals will set in motion the legislative budget review process which will dominate much of the remainder of the session. We have prepared an overview of the process, which can be viewed
HERE.
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Legislative Activity
A quick update on other legislative activity from the past week:
- Sanctuary Cities - SB 1, the Senate’s top priority that would address the issue of local law enforcement coordination with federal authorities sponsored by Sen. D. Carroll was heard and favorably reported by the Senate Judiciary Committee.
- Public Assistance Reform - Speaker Pro Tem David Meade introduced HB 1, a proposal to revise public assistance such as food stamps, Medicaid and Temporary Assistance to Needy Families (TANF), with the stated aim of getting individuals back in the workforce and off the public assistance rolls as quickly as possible. The bill began to receive close scrutiny, including that of business and employer groups who are concerned about provisions for moving individuals off Medicaid onto employer health insurance rolls.
- Pharmacy Carve Out - Sen. Max Wise, held a press conference and filed SB 50 to direct the Department of Medicaid Services to establish and directly administer an outpatient pharmacy benefit program for all Medicaid beneficiaries. The proposal is an attempt to address concerns raised by independent pharmacists, mostly centered on reimbursement issues. Rural hospitals, Federally Qualified Health Centers, insurers and others have raised concerns about the impact of this proposed policy shift. SB 50 could be the most significant health care issue addressed this session.
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Big I Legislative Update
- LEGISLATIVE DAY - A big THANKS to all of our Big I members who came out last week to our Legislative Day in Frankfort. We had a great turnout from members and legislators, which made for a great opportunity for educating and relationship building. Thanks to Chairman Rowland and Commissioner Clark and all of the legislators who attended for making this event a success!
- Committee Activity - Activity on insurance related issues remained slow, picking up just a bit last week with the first meeting of the House Committee on Banking & Insurance on Wednesday. The committee heard and favorably reported HB 313 (Rep. J. Fischer), a bill to grant immunity for the exchange of information on suspected fraudulent insurance acts to and from the National Insurance Crime Bureau. The bill would also update and revise statutory discounts on auto insurance for anti-theft devices. HB 313 is now headed to the floor of the House with a floor amendment filed to make technical corrections.
The Senate Committee on B&I did not meet during the week. The House committee is not expected to meet in the coming week.
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Key Bills
Introductions remained slow and there were no significant bill filings during the week. Here is a quick view of the main bills we are monitoring as the legislature closed out January. As always, please let us know if a bill of interest has been omitted or if you have any questions.
- Require property and casualty insurers to notify insureds and agents of changes in the terms and conditions offered in a renewal policy.
- 01/08/20 - to Banking & Insurance (S) - No Movement
- Provide that an alteration of terms shall not be considered a refusal to renew
- 01/13/20 - to Banking & Insurance (S) - No Movement
- Regulate professional employer organizations
- 01/17/20 - 2nd reading, to Rules - Don’t expect it to move further this session
- Insurance fraud reporting to NICB and changes to discounts for auto security devices
- 01/31/20 - floor amendment (1) filed - Out of committee and could be on House floor this week
- Add property damage to uninsured motorists coverage under auto insurance policies
- 01/16/20 - posted in committee - No Movement
- Allows school board to determine group health insurance plans
- 01/21/20 - to Banking & Insurance (H) - No movement
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Legislative Calendar
The Legislative Calendar for the session is available
online, but here are a few dates to keep in mind under the current calendar:
- February 17 - President’s Day Holiday (Legislative Holiday/No Session)
- February 21 – Last Day for Bill Requests
- March 2 - Last Day to File House Bills
- March 3 - Last Day to File Senate Bills
- March 31 & April 1 – Concurrence Days
- April 2 to 13 - Veto Recess
- April 14 & 15 - Two Final Legislative Days with Sine Die Adjournment scheduled for April 15
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If you have any questions on legislation, please contact Big I Ky’s President & CEO, Tara Purvis, at
tpurvis@iiak.org
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