The mainframe computer processing all of Kentucky’s unemployment insurance claims was built a decade before the 1980s-era arcade game Pac-Man.

For Immediate Release

June 8, 2017

Legislative panel warns of tight budgets ahead

COVINGTON – The mainframe computer processing all of Kentucky’s unemployment insurance claims was built a decade before the 1980s-era arcade game Pac-Man.

“Think about that,” Deputy Secretary for Education and Workforce Development Cabinet Brad Montell said while testifying before the Interim Joint Committee on Appropriations and Revenue yesterday at the Northern Kentucky Convention Center. “This thing is old. It’s slow. It’s not employer friendly at all. It runs from 7 a.m. to 7 p.m. and then it is done. It’s got to rest. It’s got to have time to think. And it will only run five-and-a-half days a week. We got to shut her down for the weekend – literally.”

Montell, who served seven terms in the state House before joining the executive branch in October, proposed upgrading the 1973 technology with a percentage of the employer contribution to the unemployment insurance trust fund. While he didn’t say what percentage would be redirected, the minimum amount needed to update the technology is estimated at $35 million.

After the Great Recession plunged the trust fund into nearly $1 billion in debt by January 2012, its coffers have since been replenished. The fund had a positive cash balance of $425.2 million as of June 1. Montell said federal authorities have advised his cabinet that the state needs about $800 million in positive cash flow for a healthy fund.

“Good things happen when our trust fund is healthy,” he said. “We are reaping the benefits of those good things.”

Benefits have increased while employer contributions continue to fall, Montell said. The next reduction for employer contributions is forecasted to take effect in January.

In addition to upgrading the 44-year-old mainframe, Montell said the state Office of Vocational Rehabilitation needs an additional $3.8 million in state tax dollars in order to receive the total amount of federal matching money earmarked for the state. Montell said Kentucky is losing about $10 million in federal tax dollars because the state doesn’t fully fund its vocational rehabilitation office. He said the lack of money means the office tasked with finding jobs for all Kentuckians with disabilities can only assist persons with the most severe disabilities.

“That is really a shame,” Montell said in reference to Kentuckians with disabilities who are turned away.

After hearing Montell’s testimony, committee Co-chair Christian McDaniel had a warning for state cabinets and advocates of various causes: Any additional tax dollars for capital projects should create enough savings within the budgeting cycle to pay for itself.

“The fact is, absent tax and pension reform, we can expect a double-digit cut in every sector of government,” said McDaniel, R-Taylor Mill. “The pension system has simply gotten into too bad of a state – been neglected far too long. When pension and Medicaid in a decade go from 18 percent to 38 percent of the commonwealth’s budget it’s got to come from somewhere.”

He said justice, social service and education advocates all have an interest in keeping the state pension systems solvent.

“You have skin in the pension game,” McDaniel said. “You’ve had it for a long time, but now a lot of long-term problems have to have very near-term solutions. It is going to be some tight budgeting times.”

In other business, Cabinet for Economic Development Deputy Commissioner John Bevington also testified at yesterday’s meeting that his cabinet hopes to entice more businesses to expand and locate in Kentucky to increase the tax base and ease the budget constraints.

Businesses have announced $5.8 million in new investment forecasted to create more than 9,500 jobs so far this year, he said. The largest of those investments is $1.3 billion to upgrade and retool of Toyota Motor’s assembly plant in Georgetown, $1.5 billion to locate Amazon’s air freight hub to Cincinnati/Northern Kentucky International Airport in Hebron and $1.3 billion for Braidy Industries to build an aluminum rolling mill in Greenup County.

“We want to surpass the highest level of announced capital investment in the state’s history and announce more than 17,000 new jobs, “Bevington said of his cabinet’s goals. “We want to move the commonwealth into the top quartile of business-friendly state rankings.”

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Kentucky: SENATE WEEK IN REVIEW

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SENATE WEEK IN REVIEW

Submitted by Senator Reginald Thomas

FRANKFORT – The 2016 Regular Session of the Kentucky General Assembly ended just before midnight Friday, April 15 as we pushed through a long week to finalize legislation, including a $21 billion spending plan for the two-year period beginning July 1, 2016.

The governor set the stage for the state budget debate when he rolled out his proposed budget during the fourth week of the session. He proposed major outlays of new money to pension systems but cut funding to universities and most state agencies by 9 percent to help come up with the money for the retirement plans. The House rejected the cuts being applied to universities and restored that funding. The Senate Republicans put the 9 percent cuts to universities back in.

The compromise reached between the Senate and House settled on a 4.5 percent reduction to funding for institutions of higher education with the exception of Kentucky State University in Frankfort, which is fully funded.

The compromise budget appropriates $973 million to the Kentucky Teachers’ Retirement Systems, an additional $186 million to the Kentucky Retirement Systems and $125 million in the form of a contribution to the “Permanent Fund” which will be a depository of certain surplus funds used to stabilize the pension funds in the most peril.

The budget the Kentucky General Assembly sent to the governor was a good plan. I sat at the table during the entire budget negotiations between leaders of both the House and Senate chambers as they worked on the finished product to send to the governor. In my mind, it was not perfect by any means, but the charge of the Budget Conference Committee was to find a compromise between the House and Senate budgets that would best meet the needs of citizens across the state.

The work was intense and the hours were long, but I was satisfied that the end product would serve our state well for the next biennium. It is very unfortunate that Governor Bevin used his veto power to make line item cuts that will affect Kentuckians across the commonwealth, especially in the area of education. A few of the vetoes made by Governor Bevin that were important components to move the state forward in the biennium are listed below:

  • Not only was the structure for the Work Ready Kentucky Scholarship Program eliminated (with his veto of House Bill 626), but $9.4 million was cut from the budget to fund scholarships in 2016-17. An appropriation of $15 million does remain for scholarships for 2017-18.
  • Appropriations for lung-, colon-, and breast-cancer screening programs.
  • Funding for Kentucky Legal Education Opportunity Program, Access to Justice and Public Safety First.
  • Funding for Every1 Reads Program ($225,700 in each fiscal year).
  • Funds for pre-school education eligibility pilot project expansion up to 200 percent of poverty level.
  • Funding for Kentucky scholarships programs based on financial need – the College Access Program (CAP) and Kentucky Tuition Grant Program (KTG).

One significant plus, the budget bill includes $60 million in state money to go toward the $250 million Lexington Convention Center to make it an A-1 facility. House Bill 55 puts in place a revenue raising measure for the project by increasing the hotel tax by 2.5 percent points.

I have said repeatedly, this project will make a $100 million difference in Fayette County and it is absolutely critical for our city. Without the expansion project, we would continue to lose convention business to competitor cities. Currently, our tourism data tells us we are only marketing to 65 percent of the available national conventions and meetings market. Without this expansion, officials said the annual $42 million impact from the convention centers would drop by more than $13 million annually. Lexington could not suffer such a blow and continue to progress so I fought vigorously for this project.

Highlights of some priority areas shielded from cuts also include:

  • $175 million for a budget reserve trust fund;
  • fully funding public schools through 12th grade;
  • fully funding anti-heroin legislation from 2015;
  • raises for state troopers;
  • fully funding Kentucky Educational Television;
  • restoring funding to the Brain Injury Alliance of Kentucky;
  • preserving the Kentucky One Stop Business Portal, and
  • allocating a $5 million bond pool for Kentucky state parks.

We also passed a two-year road plan, which funds the Transportation Cabinet.

While the budget grabbed the headlines during this legislative session, we also passed some other legislation that will have a positive impact on the lives of all Kentuckians. I will share a summary highlighting some of the bills that passed this session next week. Through those measures, we took steps to protect our most vulnerable citizens, maintain our transportation infrastructure, and invest in education, public safety and job creation across the Commonwealth.

While this legislative session is over, the work in Frankfort continues, as interim joint committees soon resume post session work.  Interim committees provide continuity of discussion for ongoing issues and provide forum for new and developing issues. It is the opportunity to take government to the people, as we sometimes have meetings outside of Frankfort, discuss issues in-depth, and allow bill identification, creation and approval for prefiling for the 2017 regular session. This enables bills to be introduced at the beginning of the session, allowing citizens ample time to express their opinions on the measures.

Please stay in contact with me during the interim by emailing me directly at reginald.thomas@lrc.ky.gov. Thank you and enjoy the remainder of our wonderful Kentucky spring.

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Kentucky Senate approves its version of state budget plan

For Immediate Release

March 23, 2016

Senate approves its version of state budget plan

FRANKFORT—The Senate passed a state budget proposal on Wednesday that restores many of the governor’s priorities for the next two years, including a “permanent fund” for future pension spending, cuts to secondary education funding and performance-based appropriations for college and universities.

All in all, the Senate budget bill includes many of the cuts featured in the Gov. Matt Bevin’s January budget proposal, many of which didn’t survive the House budget plan passed last week.

Still, Sen. Chris McDaniel, R-Latonia, the Senate budget committee’s chairman, said it was a balanced effort. Not all the governor’s cuts were preserved.

“The thing I’d say I’m most proud of is that this budget is structurally balanced,” he said. “We do adopt many of the governor’s recommendations for the budget stabilization plan throughout the course of this bill, but we take monstrous steps – historic steps – on maintaining stability and introducing responsibility in addressing the most pressing problem facing us.”

That, he said, is the state pension program challenge, which has unfunded liabilities of more than $31 billion. To start reducing that figure, the Senate budget reinstituted many the governor’s cuts, including a 9 percent reduction in funding for Kentucky colleges and universities.

The budget also resuscitated the governor’s proposal to switch that funding to a performance-based model, with a quarter of the state funding to be based on student retention, graduation rates and other metrics.

The Senate removed from the spending plan a proposal from the House to establish a Work Ready Kentucky Scholarship program, which would make tuition free for high school graduates who enroll in the state’s community colleges. The House budget funded scholarships to the tune of $13 million for the 2017 fiscal year and almost $20 million the following year.

That was cut from the Senate budget, along with funding earmarked for specific projects like school renovations, the Lexington Convention Center and help for areas hit hard by a drop in the coal industry.

The Senate budget passed with only two dissenting votes, while nine Senators passed on the bill.

Sen. Denise Harper-Angel, D-Louisville, said she had reservations about cuts made by the budget, including $1.5 million to Court Appointed Children’s Advocates (CASA) programs, $15 million that was to renovate the Kentucky School for the Blind and $1 million a year to promote breast and cervical cancer screening for women.

“I believe these cuts will adversely affect women, children, families and the disabled. For these reasons and more, I pass,” said Harper-Angel, before offering that she hopes the final budget will offer “better choices.”

Sen. Brandon Smith, R-Hazard, one of two dissenting votes, admitted he was torn. He likes the effort to control the pension problem, but was disappointed in the removal of aide for stricken coal-producing areas.

“I cannot go home this weekend without casting a vote to help bring some reasoning back into this discussion,” he said.

The proposed budget did, however, include some spending not in the House budget, including $32 million in Justice Cabinet funding to fight heroin abuse – the House had reduced it to $20 million – and setting aside $250 million in the “permanent fund” for future pension fund payments. Gov. Bevin’s budget wanted the fund to include $500 million, while the House budget proposed using that money immediately on other expenditures.

The budget is soon expected to land in a conference committee so that Senate and House members can iron out their differences in each of their preferred spending plans.

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Louisville judge sends defendant to prison because drug court ‘about to be eliminated’

By Jason Riley

Connect

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LOUISVILLE, Ky. (WDRB) — A Jefferson Circuit Court judge on Wednesday sent a defendant to prison instead of allowing her to get treatment in a local drug court, at least in part, he said, because drug court will soon no longer “be an option” in Kentucky.

“It’s about to be eliminated,” Chief Jefferson Judge Charlie Cunningham said in a hearing. “We don’t really have the money for it, so I’m not going to put anybody in drug court knowing that in a couple months that it’s going to cease to exist.”

Cunningham’s ruling came on the heels of testimony this week from Kentucky Chief Justice John Minton, who told legislators that proposed cuts to the court system will likely eliminate 600 jobs and shutter drug courts across the state, among other losses.

“The whole future of Kentucky’s court system hangs in the balance, and I have to make that known,” Justice Minton told the Senate budget committee Monday.

The case of Tabatha Newman’s in Jefferson County Wednesday is perhaps the first real-life example of what is in store if the budget bill passes.

Newman was in court on a motion by prosecutors to revoke her probation on drug and theft convictions, because she had been arrested on additional drug charges and failed to meet with her probation officer.

“We acknowledge she has a drug problem,” said Liam Michener, a law student working for the Commonwealth’s Attorney’s office. Michener told Cunningham that Newman has not received treatment and would continue to commit crimes if the judge didn’t take action.

Defense attorney Ryan Dischinger, who represents Newman, told Cunningham that his client had been getting drug treatment in jail since she had been arrested on the new charges in January.

“Clearly she has substance abuse issues,” Dischinger said. “I can’t hide from that.”

But Dischinger recommended that, instead of sending Newman to prison for up to three years, the judge order her to drug court where treatment could “stop the cycle of addiction.”

If sent to prison, Dischinger said, Newman would likely be released on parole soon, without having her problems fully addressed.

In drug courts, defendants remain out of prison but get close supervision and treatment and must meet goals such as finding jobs, getting an education and staying clean. Most courts across the state have drug court.

Kentucky Appeals Court Judge Irv Maze told legislators this week that losing Jefferson County’s drug court would be one of the painful casualties.

“I used to run it as the county attorney,” he said. “It is the right thing to do. It keeps people out of prison and it restores lives.”

Gov. Matt Bevin has proposed 9 percent cuts to the courts in each of the next two fiscal years.

He told WDRB in a statement last month that “Kentucky has serious financial issues to deal with, and the solution will come as a result of budgetary sacrifice on the part of many.”

Minton said closing drug court would affect about 2,500 current participants, possibly resulting in the incarceration of many of these people.

He told legislators that closing drug court programs in Kentucky right now, in the midst of the state’s drug and heroin epidemic, would “send the wrong message about our willingness to address the human aspect of this escalating problem.”

In court Wednesday, Cunningham called the possible elimination of drug courts “stupid, because the alternative is I’m going to spend a whole lot more money putting (Newman) in prison. But that’s what the General Assembly is basically saying to us.”

In an interview Wednesday, Cunningham said he believes drug courts will be among the first cuts made, before employees are laid off.

“I take people at their work when they tell me this is what will happen,” he said.

Still, Cunningham said that there is still some hope drug court will be saved and if a good candidate comes before him, he would consider the treatment option rather than prison.

Both Cunningham and Assistant Commonwealth’s Attorney Elizabeth Jones Brown said Newman was not a good candidate for drug court, given how many times she was arrested or skipped meetings with her probation officer.

“But we’re concerned with the potential loss of drug court because it is appropriate in certain instances,” Jones Brown said.

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This Week at the Kentucky State Capitol March 14-18

March 18, 2016

This Week at the State Capitol

March 14-18

FRANKFORT—An eventful week at the Capitol saw the arrival – finally – of a full House.

Four new state representatives were sworn in on Tuesday, filling vacant seats in the chamber in time for the legislative scramble as the 2016 General Assembly session heads into its home stretch. The newcomers: Lewis Nicholls, D-Greenup, a former judge and son of a former state legislator; attorney Daniel Elliott, R-Gravel Switch; Jeff Taylor, D-Hopkinsville, an economic development professional; and Chuck Tackett, D-Georgetown, a farmer and former county magistrate.

The ceremony was a prelude to a flurry of legislative action as the House and Senate passed bills focused on improved public safety, civil rights and education as the week progressed. As expected, though, the real focus of the 11th week of the General Assembly session was the biennial budget as the House passed its version with a 53-0 vote on Wednesday. The budget, House Bill 303, and related budget legislation were forwarded for Senate consideration.

The nearly $21 billion budget bill would roll back some funding cuts proposed by Gov. Matt Bevin to many areas of state government and authorize less debt than proposed in the governor’s proposal. The HB 303 budget would eliminate cuts for constitutional agencies and select education programs while fully funding the troubled Kentucky Employees’ Retirement System by tapping into $500 million the governor wanted to set aside as a permanent fund for future pensions.

With only nine legislative days remaining, the Senate now gets a chance to craft its reply. After next week, March 28-29 are concurrence days set aside for floor passage of bills from the opposite chamber. The 10-day governor’s veto recess follows, with the final two days of the regular session scheduled for April 11-12.

The legislature must agree on a budget before then or face a possible special session.

While much focus was on the budget and associated bills this week, numerous other measures took steps forward, including:

Bible classes in public schools. Senate Bill 278, which would allow public schools to offer Bible literacy classes, passed on Monday. The classes, which proponents say would not be evangelical in nature but focus on the book as literature and a sociological study, would be taught as a social studies elective. The measure has been sent to the House for consideration.

Community college tuition. House Bill 626 would provide Kentucky high school graduates with two years’ worth of paid tuition at a state community college under a bill that passed the state House by an 86-11 vote on Thursday. The bill would create the Work Ready Kentucky Scholarship Program to cover Kentucky Community and Technical College System (KCTCS) tuition for recent Kentucky high school grads or GED recipients under the age of 19 who complete applications for financial aid, enroll in at least 12 credit hours a semester, and maintain a cumulative 2.0 grade point average. The bill has been sent to the Senate.

Protected rights. Senate Bill 80 states that it would promote the rights of people to exercise their freedom of speech, conscience and religion. The bill, which was filed in response to a case in which a lawsuit was filed against a Lexington custom T-shirt shop for refusing to make shirts celebrating a gay pride event, would prevent lawsuits or punishment in such cases. The bill specifies that it protects the freedom of religion for individuals who offer customized artistic, expressive, creative, ministerial or spiritual goods and services.

Voting. House Bill 290, passed by a 57-37 vote in the House on Monday, would allow no-excuse, in-person voting at least 12 working days – including two Saturdays – before an Election Day. Kentucky currently only allows voting before an election by absentee ballot with a qualified excuse. HB290 was forwarded to the Senate for consideration. The bill has been sent to the Senate.

Coal mines. Senate Bill 297 would end Kentucky’s mine safety inspection program by converting the state’s 62 inspectors to “safety analysts” whose responsibilities would include correcting dangerous practices through “behavior modification” instead of issuing costly citations. State inspectors currently test underground mines for hazards six times a year in addition to the four federal inspections. Surface mines are tested four times: twice by state inspectors and twice by MSHA. The measure, which passed the Senate on a 25-11 vote on Thursday, now awaits consideration in the House,

Sexual assault kits. Senate Bill 63, a measure aimed at eliminating a backlog of more than 3,000 sexual assault examination kits – some as much as 40 years old. The bill also would expedite the testing of new kits, directing police to retrieve the evidence from hospitals within five days and submit the evidence to the state crime lab within a month. The bill has been sent to the House for consideration.

The legislative pace is sure to increase as the 60-day General Assembly heads into its 12th week. To stay informed on the progress of bills, to offer feedback to lawmakers or to ask questions about legislative topics, call the Assembly’s toll-free message line at 800-372-7181.

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