The Kentucky Chamber of Commerce held their annual policy conference yesterday in Lexington. Below are the takeaways on specific issues discussed.
Senator David Williams stressed that the state's fiscal situation is not good and the budget process will not be easy this session. He said there is a 500 million dollar deficit over the next biennium, which doesn't include an additional 200 million dollars the Medicaid program is requesting or 120 million is SEEK funds that schools are entitled too due to an issue with how the formula is applied. Williams also said that it will be a priority of the Senate to keep the debt capacity under 6% and that if you include the state pensions unfunded liability, there really is no room for additional bonding. Rep.Rick Rand said the House feels that budget issues are not quite as serious as Williams indicated. He recognized that it won't be an easy session, but that the House thinks that now is the time fund some needed projects - because of low interest rates and to help stimulate the economy.
Rep. Rand said he thinks the best approach is to convene members of the legislative and executive branches and the business community and meet during the summer to put together a tax reform proposal that could be voted on during the 2013 session. He said that it will take great efforts by all and that there will be winners and losers - he noted that the current sales tax exemptions all have constituencies, which will make changes difficult.
Senator Williams wants to see the personal income tax repealed and said that whatever proposal is addressed must be initiated by the House and he doesn't envision that happening with the current make-up.
There was some back and forth on this issue between Rand and Williams over where the issue should start. Rand noted that the House has passed gaming before and that it should start this session in the Senate. Williams disagreed, saying the House has never passed a Constitutional Amendment - which is the only way it will ever pass both chambers. He went on to say that this is the Governor's issue and the Governor should submit a proposal and meet with all legislators to get sign off, before it is introduced - and until that happens the issue won't go anywhere.
Williams talked about UI more so than Rand, and said that it's his understanding that the administration will propose a bill to look at UI standards and fix the way the state is able to make the interest payments on money loaned by the federal government. He said he would prefer that policy makers address these issues and that they not be negotiated by labor and industry. Rand said he doesn't believe the situation is as dire as Williams was making it out to be.
Both agreed that they would like to see redistricting voted on as early as possible during the session, Rand mentioned the first 5 or 6 days of the session and Williams agreed.
The discussion focused mainly around K-12 issues like differentiated teacher pay, teacher training, charter schools, and raising the dropout age. Sen. David Givens (R) and Rep. Carl Rollins (D) each staked out their Chambers respective positions and it appears this will be a key issue during the next session.
The panel discussion consisted of representatives from the coal and utility industry, Bruce Scott with DEP, and Sen. Brandon Smith (R). There were not specific policy initiatives discussed in regards to the next session, though Sen. Smith made it clear he wants to see incentives that will allow Kentucky to benefit from low energy rates to create jobs. The focus was on the cost that ratepayers and businesses will experience due to increased EPA regulations.
A representative from HHS in Washington shared his thoughts on the creation of health insurance exchanges. He was joined by Sen. Tom Buford and Rep. Tom Burch who shared their thoughts on topics from exchanges to a statewide smoking ban. Both seem to support exchanges though Buford seemed to be more apt to be part of a national exchange ran by the Federal government. In his comments later in the day, Senator Williams said that if exchanges are approved by Executive Order, he thinks there would be a court challenge. He said that everyone should be very concerned that the administration hasn't proposed how the states plans to handle the exchanges thus far, and that small businesses particularly associations should be concerned about the exchanges.