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The 30-day session of the General Assembly concluded at midnight this past Tuesday, after two long days of hard work and bipartisan collaboration to ensure the state’s most pressing issues were addressed.
While there were many important accomplishments this session, first and foremost, I am pleased to say the General Assembly passed significant and long overdue legislation to put the state’s public employee retirement system on a path to sustainability and solvency. Using recommendations from a bipartisan, bicameral task force that met last summer, both chambers, working closely with Governor Beshear, persistently worked on two bills to address the problem, Senate Bill 2 and House Bill 440.
Senate Bill 2 will establish a hybrid cash-balance plan for all new state employees, local government employees, legislators and judges who enter the system after Jan, 1, 2014. It will not affect current and retired employees, nor will it affect teachers’ retirement. It will require the full actuarially required contribution (ARC) to be paid to the pension system starting in fiscal year 2015. Any future cost-of-living adjustments for retirees are to be pre-funded.
The state will contribute 4 percent and the employee five percent, with the plan to be managed by the Kentucky Retirement System (KRS). The plan will guarantee employees a 4 percent return on investment. Employees will be fully vested with contributions and returns after five years and can take the benefits accrued with them should they change jobs. The funding solution for Senate Bill 2 was passed in House Bill 440, through bipartisan collaboration. It is important to note no new taxes or lottery revenue will be used for the funds to pay the ARC. Instead, the funding will come from an adjustment to the personal tax credit, tax loophole closings and enhanced tax collection efforts. With the passage of these bills, state and local government employees’ retirement will be protected and the state will save an estimated $10 billion over the next 20 years.
Bipartisan compromise was reached late in the day Tuesday on Senate Bill 50, better known as the hemp bill. Senate Bill 50 would establish a framework for industrial hemp farming if the federal government legalizes its growth. Since Kentucky’s climate is ideal for growing industrial hemp, it is important for Kentucky to be in a position to benefit from the potential jobs created both in agriculture and in the manufacturing of goods made from industrial hemp, such as paper, clothing, rope, and even certain automobile parts. U.S. Sen. Rand Paul, U.S. Rep. Thomas Massie and U.S. Rep. John Yarmuth, along with James Comer, Kentucky’s Commissioner of Agriculture, agreed to seek a waiver from the federal government for hemp production as soon as the regulatory framework is established. I commend Commissioner Comer, Sen. Paul, Congressman Massie and Congressman Yarmuth, among others, for their diligent work to get this bill passed.
As the General Assembly strengthened the pension system, so did it enact measures to strengthen Kentucky’s educational opportunities. Senate Bill 61 would give motivated and prepared students the ability to graduate from high school early. Funds normally used for the student’s senior year in high school can be used to pay toward their first year of college. Senate Bill 64 would provide a student who graduates in three years with Kentucky Educational Excellence Scholarship (KEES) award for their fourth year of high school. Senate Bill 97 would allow local school districts to adopt a policy requiring students to stay in school until age 18 or graduation, whichever comes first, with a stipulation that schools offer an approved alternative education program for at-risk students.
A bill to ensure our children’s safety while at school was passed unanimously by both chambers. Senate Bill 8, based on recommendations from the Kentucky Center on School Safety, requires schools to adopt a comprehensive safety plan, have twice-yearly emergency drills, and share school diagrams with local first-responders.
The passage of House Bill 7 represents a bipartisan commitment to the state’s six public universities by granting them $363 million in bonding authority for 11 capital projects. The universities will pay for the debt out of their own dedicated revenue streams, not tax dollars.
A measure inserted by the Senate precludes the use of tuition increases to pay the debt. This measure will have the added benefit of creating more than 5,000 construction jobs.
This session set a new tone for bipartisan collaboration, with both chambers reaching a compromise on a measure that would give more transparency to the state’s special taxing districts. Known as House Bill 1, this measure would strengthen public support for these entities, such as library boards, water and sewer boards, and fire districts by requiring them to conduct regular audits and to publish their financial statements online. In addition, the entities would be required to submit a budget report to their local fiscal court and hold a public hearing before imposing a new fee or increasing the rate of an existing tax. While many of these districts act in accordance with their public mandate as they provide valuable public services, this would ensure transparency and accountability, always of utmost importance when taxpayers dollars are involved.
Lastly, both the Senate and the House overrode the Governor’s veto on House Bill 279, the Religious Freedom Act. This bill reaffirms the most basic of American principles by specifying that government shall not burden a person’s or a religious organization’s freedom of religion and protecting the right to act or refuse to act on religious grounds. In addition, the bill maintains the strict standard of scrutiny used to evaluate the legality of any infringement on religious freedom.