It takes a lot of effort to get to that point, of course. Stakeholders need to be included early on, because they are the ones who will be most affected by any change, and the public must have the chance to weigh in as well. It’s a process that can take months, but when it works, the positive impact is measured in years.
When it doesn’t work, however, problems arise, as we have seen at the Capitol during the past two weeks.
The General Assembly began heading down that wayward path when House and Senate leaders presented and then pushed through a major reform of our public retirement systems in about nine hours. Four days later, those leaders followed the same single-day playbook with the state’s $22 billion budget and a massive tax-reform plan that had not been discussed publicly at all before that morning.
It is an understatement to say that a negative reaction followed in the wake of these actions. You have to go back exactly 30 years to find a rally as large as the one that came to the Capitol early last week to protest the pension bill, which will cost taxpayers billions of dollars more than necessary while providing a much inferior retirement benefit for those hired after the end of this year.
The blowback against the tax plan was also considerable. Many of my colleagues and I oppose it because the net effect is that it raises taxes on 95 percent of us while reducing them for the upper five percent.
The National Federation of Independent Business says this plan is a “disaster” for small businesses, and AARP understandably opposes lowering the income-tax exemption by a fourth for retirees. The House saw the error of its ways with this provision and tried to correct it on the same day, but the Senate, at least so far, has indicated it will not budge.
This plan also expands the sales tax on array of services, including auto repair, pet grooming and veterinary care for non-farm animals, landscaping and even bowling and golfing.
As for the budget, there is more per-pupil funding, but it amounts to about 10 cents extra each school day for the next two years. It is difficult to praise a dime increase at a time when we cannot afford even that for a single new textbook.
The budget also calls for our postsecondary schools to slash spending further, and many other worthwhile programs are cut completely.
As of this writing, all three of these bills were still sitting on the governor’s desk, and he has 10 days, excluding Sundays and holidays, to sign or reject them. That authority includes a line-item veto that can only be used on budgetary measures.
The General Assembly will consider any vetoes – and potentially pass more bills – when it returns on April 13th and 14th for the legislative session’s final two days.
One veto made last Thursday will have to be addressed, because without this bill, local governments and schools are back on track to having to pay 50 percent or more in retirement costs next fiscal year because of much more conservative projections made by Kentucky Retirement Systems.
Governor Bevin did express support for that phase-in, but opposes the bill’s other main provision, which would give agencies like our regional universities and health departments a chance to opt out of the state retirement system as long as they pay off their portion of what is owed over the next several decades.
Although budget, revenue and pension bills dominated the legislative agenda this year, there were numerous other new laws to pass as well – and there were some major issues that will have to wait another year before they can be reviewed again.
I will cover those more next week. In the meantime, please don’t hesitate to keep contacting me in the months ahead if you have any questions or concerns about state government.
My email is [email protected] and the toll-free message line is 800-372-7181. Those with a hearing impairment can call 800-896-0305.
The General Assembly’s website – www.lrc.ky.gov – has the full texts of bills and other information that will also help keep you informed.