KY Election Update

Last night we provided you an unofficial and timely update on Kentucky's election results. In doing so we had a couple of errors in our report on the State House races and we wanted to correct that in this update. In addition, we wanted to provide a bit more information on the state legislative candidates that won the various seats last night.

State House

Republicans in the House will maintain a super majority after last night's election. Based on unofficial results it appears the GOP will control the House 61-39, a net loss of two seats. It is worth noting that there were 4 incumbents who lost in races decided by less than 10 votes, so if there are recanvasses or recounts that lead to different outcomes then the numbers in the House could change slightly.

There were 8 incumbents defeated last night, 6 GOP and 2 Democrats. In addition, there were 24 open seats last night, with 14 won by GOP and 10 by Democrats. This means that there will be 32 new members of the 100-seat House when it convenes in January. Below is more information on last night's results:

Incumbents who lost 8 (6 GOP-2 DEM)

Jeff Greer (D) by Nancy Tate (R)

Linda Belcher (D) by Thomas Huff (R)

Toby Herald by Cluster Howard (D)

DJ Johnson (R) by Jim Glenn (D)

Phil Moffett (R) by Tina Bojanowski (D)

Ken Fleming (R) by Maria Sorolis (D)

Larry Brown (R) by Ashley Laferty (D)

Jill York (R) by Kathy Hinkle (D)

Open seats 24 (14 GOP-10 DEM)

Randy Bridges (R) (Created by Watkins (D) retirement)

Larry Elkins (R) (Created by Imes (R) retirement)

Chris Freeland (R) (Created by Coursey (D) retirement)

Scott Lewis (R) (Created by Castlen (R) running for Senate)

Steve Sheldon (R) (Created by Decesare (R) retirement)

Savannah Maddox (R) (Created by Linder (R) retirement)

Ed Massey (R) (Created by Wuchner (R) retirement)

Travis Brenda (R) (Defeated incumbent Shell (R) in Primary)

Matthew Koch (R) (Created by Overly (D) retirement)

Les Yates (R) (Created by Mayfield (R) retirement)

Deanna Frazier (R) (Defeated incumbent Morgan (R) in Primary)

Adam Bowling (R) (Created by Nelson (D) retirement)

Bobby McCool (R) (Created by Wells (R) retirement)

Derek Lewis (R) (Defeated incumbent Tim Couch (R) in Primary)

Rob Wiederstein (D) (Created by Mills (R) running for Senate)

Patti Minter (D) (Created by Richards (D) retirement)

Josie Raymond (D) (Created by Riggs (D) retirement)

Nima Kulkarni (D) (Defeated incumbent Horlander (D) in Primary)

Charles Booker (D) (Created by Owens (D) retirement)

Joe Graviss (D) (Created by Kay (D) retirement)

Buddy Wheatley (D) (Created by Simpson (D) retirement)

Cherlynn Stevenson (D) (Created by Benvenuti (R) retirement)

Terri Clark (D) (Created by Sinnette (D) retirement)

Lisa Willner (D) (Created by Wayne (D) retirement)

State Senate

Republicans in the Senate will grow their super majority after last night's election. Based on unofficial results it appears the GOP will control the Senate 28-10, a net gain of one seat after successfully defending 16 incumbents, winning an open seat, and beating one incumbent Senate Democrat Caucus Chairman Dorsey Ridley. Sen. Parrett (D) ran unopposed and Sen. Webb (D) won re-election. More details on the two changes in the Senate after last night's results:

Matt Castlen (R) (Won open seat created by Bowen (R) retirement)

Robby Mills (R) (Defeated incumbent Dorsey Ridley (D))

We will have additional analysis in the days and weeks ahead.

KY Election Results

Edited 11/7 7:50am - To reflect Rep. Herald loss, changing House majority to 61-39

Kentuckians went to the polls today in large numbers to elect candidates to state, local and federal offices. We will be providing more analysis about the outcome of the elections in the days ahead, but wanted to get you the latest unofficial results:

State House

Republicans in the House will maintain a super majority after tonight's election. Based on unofficial results it appears the GOP will control the House 62-38 61-39, a net loss of one seat two seats after 90 contested races. Overall it was a mixed bag of results with incumbents of both parties losing and the 24 open seats being split by both parties. 

7 incumbents lost (5 R and 2 D) 8 incumbents lost (6R and 2 D):

York (R)

Greer (D)

Moffett (R)

Fleming (R)

Belcher (D)

DJ Johnson (R)

Brown (R)
Herald (R)

In the 24 open seats, GOP won 14 and Democrats won 10.  

State Senate

Republicans in the Senate will grow their super majority after tonight's election. Based on unofficial results it appears the GOP will control the Senate 28-10, a net gain of one seat after successfully defending 14 incumbents, winning an open seat, and beating one incumbent Senate Democrat Caucus Chairman Dorsey Ridley. Sen. Parrett (D) ran unopposed and Sen. Webb (D) won re-election.

Congressional Races

All 6 of Kentucky's congressional seats were up for re-election and all six incumbents were re-elected. Kentucky's congressional delegation remains 5 GOP & 1 Democrat. The race with the most national interest was the 6th congressional district held by Rep. Andy Barr who faced a stiff challenge from Amy McGrath, but Barr held on to win by 10,000 votes.

Supreme Court

Kentucky had one vacancy on its Supreme Court with the retirement of 3rd district Justice Daniel Venters. Debra Lambert was elected to serve the 3rd Supreme Court district. 

Early Analysis

It was a very active election cycle, particularly in the state legislative races after a volatile 2018 Session and a record number of contested races. However, at the end of the night things appear much as they did before the candidate filing deadline in January with GOP super majorities in each chamber. More analysis to come in the days ahead. 

Election Preview

Tomorrow, Kentuckians will go to the polls bringing a close to the 2018 election season. This election cycle includes not only a hotly contested congressional race in Kentucky's 6th district in Central KY, but also more contested state legislative races than we've seen in years. Judicial and local government candidates will round out lengthy ballots across the Commonwealth. With that in mind, we hope this short analysis will be helpful as tomorrow night's results begin to pour in. As always, we'll provide an update tomorrow evening and a more detailed analysis shortly thereafter.

State Legislative Races

House of Representatives

All 100 state house seats are up for re-election. Of the 100 seats, 90 are contested and there are 23 open seats, where the incumbent either chose not to run for re-election or was defeated in the May primary. Here's the breakdown:

Of the 90 contested races – 60 are currently GOP seats and 30 are currently DEM seats.

With 23 "open" seats we are guaranteed at least 23 new members of the House when the legislature gavels in session in January. Of the 23, 12 are currently held by the Democrats and 11 by the Republicans.

The following ten House members don't have opposition  - Rep. Charlie Miller (D – Louisville), Rep. Russ Meyer (D – Nicholasville), Rep. Attica Scott (D – Louisville), Rep. John Sims (D – Flemingsburg), Rep. Kelly Flood (D – Lexington), Rep. David Meade (R – Stanford), Rep. Jeff Hoover (R – Jamestown), Derek Lewis (R – London), Rep. Angie Hatton (D – Whitesburg), and Rep. Rocky Adkins (D – Sandy Hook)

The current make-up of the House is 62-37, with the Republicans holding a super majority. There's one vacant seat, which was created when Governor Bevin appointed Rep. Kenny Imes as the County Judge Executive in Calloway County. Having at least 60 seats allows the majority party to pass certain measures, like constitutional amendment legislation, revenue bills, and procedure and rule changes without seeking support from members of the minority.

Senate

Nineteen, or half of the Senate's 38 seats are up for re-election tomorrow. Here's the breakdown:

There are 18 contested races. Of those, 16 are GOP seats and 2 are DEM seats.

Senator Dennis Parrett (D-Elizabethtown) is the sole member without a contested race.

There is one open seat, with incumbent Senator Joe Bowen not running for re-election

Two current state House members are running for seats in the Senate. Rep. Matt Castlen is running for the open seat, while Rep. Robby Mills is running against incumbent Senator Dorsey Ridley.

Senate Minority Leader Ray Jones is running for County Judge Executive in Pike County. If he wins, a special election will be called to fill his Senate seat.

The current make-up of the Senate is 27 to 11, with the Republicans – like in the House – holding a supermajority of the votes. A supermajority in the Senate is considered to be 23 seats.

What To Watch For

Following a contentious and controversial debate and vote on pension reform legislation during the session, teacher and state employee organizers began a "Remember in November" campaign focusing on members who voted for the pension changes. While there was some impact in the May primary races, it remains to be seen whether the effort will produce any significant amount of change in the general election.

Will the Republicans maintain super majorities in the House and Senate? Legislative leaders have indicated they want to tackle "tax reform 2.0" during the 2019 session, but 60 votes in the House and 23 in the Senate will be needed to pass any revenue-raising measure. Without super majorities, a bi-partisan effort will be needed to move forward with these changes.

There are a handful of "rematches" in the House worth keeping an eye on. In the 8th, Rep. Walker Thomas (R) is running against Jeff Taylor (D), who he beat for the seat two years ago. In the 13th, former member Jim Glenn (D) is challenging Rep. DJ Johnson (R) in hopes of winning the seat back.  Brent Yonts (D), a longtime representative in the 15th, is running against current incumbent Rep. Melinda Prunty (R) who beat Yonts in 2016. The 24th has Terry Mills (D) challenging incumbent Brandon Reed (R) and in the 91st Cluster Howard (D) and Rep. Toby Herald (R) face-off for the third time.

President Trump remains very popular in rural areas of the state and recorded autodial phone calls, which were turned into radio ads, supporting several House Republican candidates. Trump's popularity declines, though, in the state's population centers, like Louisville and Lexington, which could be areas where Democrats make gains.

There continues to be heavy third-party spending in Kentucky legislative races, although maybe not quite as much as in 2016. Groups like Kentucky Tomorrow, Kentuckians for Strong Leadership and Kentucky Family Values have spent significant amounts.

Will the 6th District Congressional race between Congressman Andy Barr and Amy McGrath impact legislative races in the Central Kentucky area? This race is expected to be close and record amounts have been spent on both sides. Due to the increased interest in this race, it could possibly impact the legislative races down the ballot.

BR Sub on Education

By Dustin Miller

Commissioner Lewis and Associate Commissioner Kinney gave a presentation on the KDE budget, and a copy of their slides are available HERE. Below is a summary of key points and legislative questions, but would say the two main takeaways from the meeting are: 

- Though P-12 education received more dollars in SEEK, overall it was underfunded.

- On JCPS, Commissioner Lewis could not provide an estimate of the possible costs for state management of JCPS. He says this isn't possible until JCPS in coordination with KDE puts together a school improvement plan and that plan can not be developed until the KBE puts JCPS under state management and that process is not complete.

Other notes and legislative questions:

- Slide 3 notes - Didn't get SB 1 and full-day kindergarten dollars. Also only received 1/2 of funding for SEEK transportation

- Overall message...glad to have gotten more dollars, but still $300 million short

- Slide 8, noted that FRYSC's down in KDE budget, but received additional dollars in CHFS budget, up slightly over this biennium.

Rep Huff asked if 25 positions removed worked with districts or were they administrative? A. All district focused

Rep. Flood asked about technology funding and FRYSC's?

Lewis answered and said that FRYSC's is very important helps impact poverty which impacts learning. In addition that decisions at KDE should be data-driven and thus technology is important. 

Rep. Flood asked about PD funding and teacher development resource funding that was cut and isn't that important?

Lewis says PD is important and understands the difficult budget situation legislators faced but hopes in the future that PD funds can be increased.

Rep. Flood asked what are your top 3 goals for funding in the future?

Lewis hard to say at this point. Dealing with the current budget and will work with current KBE to set those goals in the future. 

Rand asked about program elimination in the instructional resource, what is in the $16.7 million?

Kinney: could be textbooks, computer purchases, but it varies by district.

Rep. Rand asked about cuts at KDE office, and whether there were resources necessary to manage JCPS, will it divert funds from other districts?

Lewis clarifies that he has made a recommendation, but nothing has happened yet. Hard to answer the question, because the management plan won't be put together until after the district is actually under management. Statutes and regulations say that a plan doesn't have to be put together until the KBE puts the district under management. It will be costly, but reminds members that a significant amount of dollars from KDE are already spent in JCPS.

Rep. Rand asked about Lewis' top priorities for KDE?

1. Skills Gap and CTE

2. Early grade literacy and numeracy before 3rd grades including public preschool

3. High school graduation requirements - Needs to be stronger

4. Closing the achievement gaps

Rep. Brown asked about Safe Schools funding? 

Kinney says that KDE partners with KY Center for School Safety who will get those funds. Things they do include district audits and training that are district-facing. Lewis mentions that some go for school resource officers.

Rep. Brown asked about preschool and full-day kindergarten funding?

Lewis gave a detailed answer about how the funding works for both. But specifically noted that public preschool works well and is a good program and that there are lots of kids who qualify who don't get in because of funding, which is a problem. *Very supportive of public preschool.

Rep. Brown also concerned about quality of diploma and shares concerns of Lewis about graduation requirements. 

Lewis coming to KBE in August with new regulation strengthening graduation requirements 

Rep. Huff asked about number and list of districts that don't provide full-day kindergarten? Lewis thought it was very low, but would get data to her.

Rep. Tipton noted that an alarming number didn't meet the ACT benchmarks set by CPE, which is the "college ready" number.

Sen. West how much was KDE cut? 

$54 million, but specific to Frankfort, 6.25% cut of $24 million KDE Frankfort operations

Sen. West asked about SEEK increase, do districts have an ability to use those dollars for PD, textbooks, etc? 

Yes those are flexible 

Sen. West wants to see changes to PD and new teacher development. If in two years PD is increased then would like to see these changes as part of that

Rep. Riley also spoke about PD and new teacher development and echoed the comments of Sen. West.  

A&R Notes

By Dustin Miller

The A&R Committee met in Frankfort to receive an update on General Fund receipts and a presentation on the Limited Liability Entity Tax.

State Revenue Update

Greg Harkenrider with the Governor's Office Economic Analysis provided an update on state revenues. A copy of his presentation is available HERE and the highlights and key legislative questions are summarized below:

- Expected that June receipts will be up and that receipts overall will be up for the 2018 fiscal year. 

- It is expected that Road Fund revenues will be in line with the enacted estimate and that it will be within $10 million. Two notes: gallonage appears to have gone up slightly on motor fuels tax and that although the estimate was accurate the overall revenue was not good to keep up with road fund needs

- Language in HB 487 makes KY look like South Dakota for purposes on online sales tax collection related to the recent US Supreme Court decision. Sets a de minimum standard of $100k in gross receipts or 200 transactions to have economic nexus.

Rep. Fleming asked about Wayfair timing?

Harkenrider - Going to take a prospective approach, so no back taxes. Tough part is reaching out to retailers to get them to register as a retailer in KY for sales tax. Thinks it will be a slow start and told legislators not to get their hopes up for large revenue increases in Kentucky for FY 2019.

Rep. Rudy asked about Wayfair...Estimates?

Harkenrider - Nothing official from GOEA.

Rudy said GAO says $94-140 million per year?

Harkenrider - We think those are a little high because of efforts around streamlined sales tax

Rudy asks if streamlined sales tax program that compensates online vendors for voluntary collection will fall apart?

Harkenrider - Not sure will have to follow up

Rep. Tipton asked about expansion of sales tax and questions from nonprofits and charitable organizations?

Harkenrider - Sales tax expanded to participatory admissions. Legislative intent was to catch for-profit entities. Court case in Feb. said for-profits and not for profits can't be treated separately. Thus charities are caught in this as well. McDaniel said there is interest in fixing this quickly the next time the legislature is in session.

Limited Liability Entity Tax

The LLET- Cost of Goods Sold Definition presentation was provided by Charles George, Kentucky Society of CPAs; Eric Scott, Ernst & Young; and Kevin Doyle, CFO with Congleton-Hacker Company.  A copy of their slides are available HERE.