Legislative Update - February 29th, 2020
It may not be generating as many headlines as other issues this legislative session, but a three-pronged plan to help our quasi-governmental agencies keep their doors open could be one of the General Assembly’s biggest accomplishments this year. I’m thrilled to have been a major part of the first 2 prongs so far.
The House has already approved two of those “prongs,” and the Senate is poised to vote on one of those soon. The third is the state’s budget, which should have the funding needed to make this plan work.
This is a complicated issue, but it is driven by the fact that these quasi-governmental agencies and regional public universities are facing a spike in their public-pension costs in July that they cannot afford. The legislature attempted to address that during last summer’s special session, as you may recall, but that law offered no long-term help and we argued would cost Kentucky much more and over a longer period. Early indications are very few employers see the value of that effort and are not acting on its provisions understandably.
The first “prong” doesn’t affect all of the quasi-governmental agencies, but it targets an important group within them, our public health departments. House Bill 129 calls for them to focus more on their core public health missions, such as substance abuse treatment and helping at-risk families raise healthy babies. Other programs such as restaurant inspections, meanwhile, could see their fees raised so they no longer lose money on these vital services they provide for us. In exchange, the state will redirect more money to health departments that are at greater risk of closing, which are mainly in more rural areas.
The second “prong,” House Bill 171, would change how the state and quasi-governmental agencies pay down the long-term liability in the state retirement system. Instead of using payroll to determine each agencies’ monthly retirement costs, this plan would use each agencies’ actual share of the liability instead, which is much fairer.
By setting a more fixed cost, quasi-governmental agencies and regional universities will have less incentive to privatize services that hurt the pension system, and many will also see lower public-pension payments.
Not all will, however, which is where the third “prong” – the budget – comes in. It will help the handful of agencies adversely affected by this change, because there is no way they could remotely afford it.
The hope is that the budget ultimately becoming law also includes Governor Beshear’s recommendation to set aside even more money to help the quasi-governmental agencies with their pension costs. Doing that would give them an even more stable and sustainable foundation, and it would ensure the state’s public retirement system is better protected as well.
As the legislature’s multi-pronged plan moves forward, the House voted for another bill a lot of us co-sponsored last week that takes on a fast-growing health issue: The steep rise in teen use of e-cigarettes.
Statistics show that close to a third of those 14 and younger in our country have vaped, and many are hooked before they are even licensed to drive. Under House Bill 32, which the House approved by a vote of 75-17, vaping products would be taxed at the same rate as products like chewing tobacco and snuff. That rate would also be increased under this bill, and would bring in about $50 million extra in the upcoming two-year budget. This is a priority for Governor Beshear, and it would give us another tool to cut back teen use of e-cigarettes.
Speaking of our health, the governor and health officials gave us the latest update last Thursday on the potential impact the coronavirus may have here. There is extremely small number of cases in the country so far, and only one person in the commonwealth has been tested; fortunately, that turned out to be negative.
Should that trend change, however, the state is ready to act, and if there needs to be more money or an update in law, such as limiting price gouging for healthcare needs, the General Assembly and the Governor are prepared to take additional steps.
In the meantime, it is important to take the same precautions we do with the flu, which currently is the bigger risk: Wash your hands regularly; stay home if you are sick; and limit contact like handshakes.
This week, the House will hopefully take up its budget proposal, which will undoubtedly make changes to what Governor Beshear sought when he gave legislators his plan in late January. I will cover those differences in a future column.
For now, please continue letting me know your views on these or other matters before the General Assembly. My email is email@example.com, and the toll-free message line for all House and Senate members is 1-800-372-7181. That line is open each weekday.
Thanks for all you do and holler anytime.