Governor Beshear Unveils ‘Education First’ Budget that Ends 14 Years of Cuts

Beshear also recommends millions more to counties for road repairs

FRANKFORT, KY. (Jan. 28, 2020) – Gov. Andy Beshear outlined his first budget to lawmakers on Tuesday prioritizing education, health care and protecting our children, underlining his belief that a budget is a statement of values.

“It is a budget that not only ends years of painful cuts, it also makes a major investment in public education, fully funds expanded Medicaid, makes a historic investment in protecting our children, directs dollars to breaking cycles of poverty, and I believe will move us forward as a people,” Gov. Beshear said in his first budget address Tuesday night at the Kentucky Capitol.

Gov. Beshear proposed a balanced, responsible “Education First” budget for 2020-2022 including a $2,000 raise for teachers, 1% SEEK per pupil funding increase providing an additional $87.5 million for public schools, $11 million each year for new textbooks, $18.2 million for school security upgrades, and ending more than a decade of repeated and deep cuts to higher education.

“There are finally dollars to start reinvesting in our families,” Gov. Beshear said. “Let me be clear, these dollars are limited, and they won’t undo the pain of the last 14 years all at once. So we must invest wisely and we must lead with our values. To me, those values must begin with public education. And that is exactly where this education first budget starts: Public education is the key to breaking cycles of poverty.”

Prioritizing Kentucky children and their health and safety, the governor’s proposed budget includes funding for an additional 350 social workers, $5 million each year for preschool programs in disadvantaged areas, and $1 million each year, which would leverage millions more in federal funds, to enroll more children in the Kentucky Children’s Health Insurance Program (KCHIP). Gov. Beshear is committed to reversing the troubling trend of fewer eligible children being enrolled in KCHIP.

“Health care is a basic human right and it is our responsibility to sign every Kentucky child up for some form of health coverage,” he said.

Responsible, Balanced and Transparent

State Budget Director John Hicks, who has worked on 16 budgets for eight Kentucky governors of both parties, said the budget is responsible, balanced and transparent. The proposal accounts for every dollar.

Gov. Beshear, Director Hicks and the budget staff crafted a budget with the lowest ratio of debt service to state revenues of any budget since the state adopted its debt affordability policy, relies on less than half of the fund transfers of recent budgets, less than half of the new revenue included in the current budget, and that adds to the rainy day fund. During the two fiscal years, Kentucky will retire more debt than it takes on.

The Consensus Forecasting Group, a panel of budget experts and economists, estimates the state having an additional $841.7 million in tax revenue for the biennium.

While each of the last two budgets has had at least $609 million in fund transfers from pots that no longer support their original purpose or from those with far more dollars than needed, this proposal is less than half at $288 million.

Gov. Beshear’s budget proposal includes $147.7 million in new revenue, drastically smaller than recent budgets, with those funds coming from sports betting, a tax increase on cigarettes and other tobacco, a new tax on vaping, and an increase in the minimum for the limited liability entity tax to adjust it for inflation. Republican lawmakers have already sponsored proposals that would boost some of those revenues as much, or even more, than the governor’s proposal.

By contrast, the last biennium budget created $388 million in new revenue, more than twice Gov. Beshear’s proposed new revenue.

“Those are the pieces to a responsible and balanced budget,” Gov. Beshear said.

Education

Gov. Beshear’s first budget is dedicated to his biggest priority: Kentucky children and their education. His proposed budget increases education spending by $400 million in the next biennium.

“We face a teacher shortage that threatens the quality of our public education in Kentucky,” Gov. Beshear said. “Without good teachers, we cannot produce the best students or the best workforce. So our budget prioritizes our teachers.”

The spending prioritizes teachers with a one-time $2,000 raise for all full-time teachers, reinstates the teacher loan forgiveness program and teacher’s scholarship program, and recommends funding the full actuarial health insurance contribution for retired teachers.

The governor pointed out 15 states have given their teachers raises in the last two years, several led by Republican governors including Alabama, Arizona, Arkansas, Idaho and Mississippi.

Gov. Beshear’s plan would appropriate $18.2 million in school security upgrades to fund the first step in the school safety bill lawmakers passed in 2019. The amount equals the full funding the Kentucky School Board Association said is needed for statewide physical security improvements in our public schools.

“For our students to learn, we must also provide school facilities that are safe and protect our students,” Gov. Beshear said.

While the budget invests heavily in K-12 education, the governor said for the budget to be truly education first the state must also invest in post-secondary education. Following cuts to higher education in 12 of the last 13 years, the proposed budget ends the repeated slashing of post-secondary funding and begins building back with a 1% increase for all institutions.

“In this budget, we’re ending the cuts to our public universities and community college system,” Gov. Beshear said. “These cuts have been painful, and have led to consistent tuition increases for our students. And we are just one of two states in the entire country that hasn’t reinvested in higher ed. That should end tonight.”

Health Care

Gov. Beshear’s proposal includes fully funded Medicaid and Medicaid expansion. He said the state will work to sign up every eligible Kentuckian.

“Next is another area where we can’t afford to cut – health care. That’s because our people have some of the worst health outcomes in the country – we’re in the top 10 in lung cancer, diabetes and heart disease,” the governor said. “Access to health care is a basic human right and we can’t turn our backs on the progress that we’ve made.”

Further Protecting Our Children

With Kentucky often ranked as the worst state for child abuse, Gov. Beshear’s budget boosts funding to Child Protective Services to increase the number of social workers by 27%, from 1,309 to 1,659, to reduce the average caseload of 19 per social worker. The caseload is even higher in many locations. He implored lawmakers to support the investment, $7 million in fiscal year 2021 and $24.5 million in 2022, to reduce the abuse and neglect in Kentucky and better protect our children.

“This budget also makes historic investments into our most vulnerable – our children and our struggling families,” Gov. Beshear said. “That starts with addressing the rampant abuse and neglect of our children in the Commonwealth. And I want to address it now. Our social workers have too many cases and that has dire consequences. Abuse is not caught, kids fall through the cracks, dedicated public servants burn out. … Let’s act right here and right now to stop child abuse and neglect in Kentucky. ”

Gov. Beshear also designated funding to preserve child support enforcement, including an additional $13 million over two years.

Ending the Pain

The budget, the first since the 2006-2008 biennium with no spending cuts in the general fund, ends 14 years of pain.

“Since 2006, we have seen deep, difficult and historic cuts in our state budgets. Those cuts were not simply numbers on a spreadsheet. They were lost services, lost opportunities, even lost lives. They were a lack of support to repair broken lives,” Gov. Beshear said.

“They meant our kids learned from outdated textbooks, our families drove on unsafe roads, our social workers were assigned far too many cases, and many of our teachers left the classroom. The last 14 years of cuts didn’t just ‘cut the fat,’ they went deep in the bone, year after year after year. Tonight, I am proud to report that I am submitting a budget that ends these 14 years of painful cuts.”

Pay Increases and Funded Pensions

Gov. Beshear is proposing to fully fund pensions and give state employees a much-deserved 1% raise each year.

Local and state law enforcement would receive a $600 stipend increase, increasing the stipend from the Kentucky Law Enforcement and Firefighters Foundation Program to $4,600 for more than 8,000 law enforcement officers and more than 3,800 firefighters.

Kentucky state troopers also will receive salary increases aimed at retaining state police with the governor recommending $5.3 million in the 2021 fiscal year and $8.6 million in 2022.

Other Vital Projects and Efforts

To help expand health care in the state, Gov. Beshear included the requested funding from the University of Louisville for a $35 million loan to acquire struggling health care facilities in Louisville.

Gov. Beshear also directs about $18 million in coal severance tax over two years to the respective Kentucky coal counties for the first time since the inception of the tax.

Transportation priorities include building the I-69 bridge and speeding up the Mountain Parkway.

“These projects will open up commerce in rural Kentucky in a major way and will improve the quality of life for our people that live in these regions,” Gov. Beshear said. “We’re also investing a record amount of money into the safety of our rural roads. Our rural roads are the seventh most dangerous in the country. We’ve lost nearly 7,500 of our brothers and sisters, our parents and children, on these roads over the last 10 years. Using a combination of state and federal funds, my administration will put $100 million to improve our rural road conditions.”

Following through on his commitment to equal pay for equal work, Gov. Beshear is proposing $1 million in grants each year for the Department of Local Government to administer to local governments to conduct equal pay audits. He said the state is leading by example.

“If we in government are going to demand women make the same amount as men in the private sector, we have to make it a reality in the public sector,” he said.

Gov. Beshear reinstates funding for the Commission on Women, reinstates the Office of Minority Empowerment and provides an additional $200,000 each year to reinvest in the Commission on Human Rights.

The governor, whose team has worked around the clock on the budget since he took office just seven weeks ago, proposed the historic budget in spite of Kentucky’s many challenges including a $109 million increase in the corrections budget fueled by a skyrocketing incarceration rate and crumbling infrastructure that has led to the state losing more than 1,200 beds.

“From a moral standpoint, criminal justice and prison reform is the right thing to do. My faith teaches me that,” Gov. Beshear said. “But we must also do it based on our current reality and on our budget. We cannot afford to continue this incarceration rate and educate our children.”