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Kentucky lawmakers take on state budget

Posted at 6:21 PM, Feb 04, 2020
and last updated 2020-02-04 18:25:26-05

FRANKFORT, Ky. (LEX 18) — Governor Andy Beshear believes his budget proposal is the way to go.

"It's been six days since I've submitted a budget to the legislature and let me tell you, I'm excited about that budget," said Beshear in a video Tuesday morning. "For the first time in 14 years, we don't have to make the painful cuts that has defined this budget process."

A few minutes after the video was released, Beshear's budget director, John Hicks, defended the proposal in back-to-back committee meetings.

"The governor's budget is balanced and it's transparent," said Hicks.

After his presentation, Hicks was asked about Beshear's funding of the pension system.

Recently, that funding has come under question after testimony by David Eager, the Executive Director of Kentucky Retirement Systems. According to the Lexington Herald Leader, Eager told lawmakers the current budget proposal would cost KRS millions of dollars in pension contributions. Essentially, Eager said KRS would get less money than they expected over the next two years.

However, in his video, Beshear defended his funding proposal.

"This budget puts record funding into that system," said Beshear. "The most money that has ever been put into it."

He promised to keep his promise of funding the pension system.

"Our pensions - record funding - because that pension is a promise," said Beshear. "I fought for it. I will continue to fight for it because to you, our public employees, we made you a promise and we're going to keep it."

So where is the discrepancy coming from? Hicks, the budget director, said it has to do with a miscalculation involving the employer contribution rate from quasi-governmental groups, like local health departments, rape crisis centers, and regional universities.

"Recently there was testimony that the governor's budget had left an 83 million gap in fully funding the pensions," said Hicks. "That calculation didn't have the clarification and it had insufficient information."

Hicks says with the correct numbers, the gap will be between 25 and 27 million and he believes other things in the governor's budget will contribute to more money for the pension system.

Lawmakers, who are now tasked with passing a budget bill, said they will look over the governor's proposal carefully. However, they made it clear that changes will be made.

"There will be significant changes in the House version, as I know the Senate will make significant changes from the House version to the Senate version," said Rep. Steven Rudy, chairman of the House Appropriations and Revenue Committee. "I fully expect we'll end up in a full conference committee before it's all said and done."

Rep. Rudy said that it's typical for a bill to change between the proposal and the final version. Right now, he sees Beshear's proposal as "optimist," but he believes they can work with it.

"It's well thought(out) though and I think we can have something to work from and hopefully find some common ground," said Rudy.