Kentucky Political News Headlines

Monday, December 25, 2017

Committee Schedule

LRC Leadership agreed on the 2018 Regular Session committee meeting schedule and it's available HERE.

Sunday, December 24, 2017

Friday, November 10, 2017

Statement from Kentucky House Speaker Pro Tempore David Osborne, House Majority Leader Jonathan Shell, Majority Whip Kevin Bratcher, and Majority Caucus Chairman David Meade


Update from Thursday, November 9, 2017

Statement from Kentucky House Speaker Pro Tempore
David Osborne, House Majority Leader Jonathan Shell, Majority Whip Kevin Bratcher, and Majority Caucus Chairman David Meade
Update on Independent Investigation and Policy Work

FRANKFORT, Ky. (November 9, 2017) – "We wanted to offer a report to the media and public about the independent investigation we launched into the allegations and reports of inappropriate conduct swirling in the state capitol.
The law firm of Middleton Reutlinger has begun its work. They are simultaneously advising us on personnel and human resources matters while handling the preliminary phase of the independent investigation. Our outside counsel has advised us that they should be able to provide a preliminary investigatory report in about ten days. At that point, we will review the findings and make further decisions about how to proceed.
We may—as some have suggested—decide to turn the matter over to the Legislative Ethics Commission, as they have unfettered subpoena power. We may also decide that our outside firm can complete the independent review. We won't know the right path forward until we see the preliminary report, but we are keeping all of our options open. Ultimately, we want the deepest, most independent investigation possible. We intend to make decisions about our caucus and staff when the full facts emerge. None of us condone sexual harassment or inappropriate behavior, and we want the facts about anything and everything that happened.
Speaker Pro Tempore Osborne and Majority Leadership met with House Democratic Leader Rocky Adkins about this situation and appreciated the constructive conversation. At this point, the independent investigation is underway and should not be interrupted by politics or personal emotions. The facts should be allowed to emerge and guide future decisions. We will report back to the media and public on the status of the investigation when Middleton Reutlinger has delivered its preliminary review. If anything changes with the status of the investigation, we will alert the House and public immediately.
We have taken some internal caucus actions because of this situation. The Leadership Team has appointed Representative Jerry Miller of Louisville as Co-Chairman of the Public Pension Oversight Board. Vice-Chairs of two other affected committees have been elevated to Chairman. Additionally, Representative Myron Dossett of Pembroke has been elevated to a subcommittee chairman.
As this investigation unfolds, we are simultaneously keeping the House on track by working in good faith with the Senate and the Governor on the pension issue. Additionally, meetings of the Adoption and Infrastructure working groups continued this week, two critical policy matters. Budget Review Subcommittees also continued their work this week in preparation for the upcoming budget session. The entire Leadership Team is committed to an orderly budget process, as the Commonwealth faces extremely difficult fiscal circumstances. 
The Leadership Team is grateful for all members of the Republican Caucus and the entire House of Representatives for continuing to represent their constituents and doing the work of the people as the independent investigation unfolds. We also appreciate the ongoing dialogue with Governor Matt Bevin as we tackle the difficult issues of the Commonwealth.  Our message to the people of Kentucky continues to be that we will not fail you in finding the facts or in solving the severe financial problems facing our state."

Sunday, November 5, 2017

Speaker Steps Down

Late last week, the media reported that the Speaker of the House Jeff Hoover (R-Jamestown) had secretly settled a sexual harassment complaint with a member of his staff. The media reports included suggestive text messages between the staffer and the Speaker. Additional media reports have identified several other GOP House members (Rep. Jim Decesare, Rep. Brian Linder, and Rep. Michael Meredith) and House leadership staff that may have been involved or knowledgeable about the settlement. There were even mentions of an FBI investigation. After calls for the Hoover’s resignation from several GOP House members and the Governor, he ultimately stepped down from his leadership post on Sunday, but maintains his House seat.

This media report gives a good timeline of the entire situation.

According to this statement by the House GOP Leadership:
- Speaker Pro-Tem David Osborne has taken over the operations of the House;
- An independent investigation to look into the matter has been established;
- The three members listed above have all been stripped of their Chairmanships until the independent investigation is completed; and
- The House GOP Leadership team will meet with legal counsel this week to determine actions in regards to staff.

A new Speaker cannot be elected officially until the House is back in session as the Speaker is a constitutional officer and elected by the entire body of the House. However, the House GOP caucus could nominate a new Speaker in the near future pending ratification once the legislature is back in session.

This scandal certainly comes at a critical time for the legislature as they are working with the Governor to craft a public employee pension reform bill to pass in a special session before the end of the year. This will likely have some impact on that process.    

Monday, October 30, 2017

Pension Bill & Resources

Over the weekend the draft public employee pension reform legislation was released and a copy is available for download below. In addition, we have provided download links for a couple of other resources. As of this post, no date for a special session to consider the draft bill has been set.

Pension Reform Draft

Section by Section Summary

Side by Side Comparison

Thursday, September 21, 2017

KY Chamber Tax Summit

The Kentucky Chamber of Commerce held a Tax Summit in Lexington yesterday.  The conference was well attended and included approximately ten House members who attended as participants.  Governor Bevin was called to a meeting in DC and unable to speak in person, however, he sent a video where he discussed his vision for tax reform in Kentucky.  Additionally, Speaker Hoover was added to the agenda and spoke during lunch. A complete summary is below, but a few highlights to make you aware of:

  • Speaker Hoover announced that the House will appoint a Working Group on Tax Reform to begin meeting after the special session on pension reform. 
  • All speakers seemed to advocate moving from an income based taxing system to a consumption based system.
  • Multiple speakers, including the Governor and Speaker Hoover, indicated complete elimination of the income tax isn't feasible, and decreases would need to be phased in.
  • Local governments will no longer advocate for LIFT, which limits local options sales tax to specific projects with a sunset period.  Instead they will advocate for broad authority related to local option sales tax.
  • Everything is on the table.
  • Reviewing tax expenditures will be a key part of the process.  The Governor has often said that Kentucky's exemptions are more than revenues. 
Jennifer Barber, with Frost Brown Todd, began the conference with a presentation on what tax reform in KY might look like.  Her slide presentation is attached.  Jennifer noted that an additional 1 cent on the sales tax would raise approximately 580M annually and if the sales tax was expanded to include services, an additional 2.78B would be realized.

Dr. Bill Fox, from the University of Tennessee, and well known to those who've followed various tax reform efforts in Kentucky was the next presenter.  His slides are available HERE.  Dr. Fox identified the key elements of a good tax system to be: raising appropriate level of revenues, a system that provides competitiveness, low administration and compliance costs, and a system that is fair.  He also suggested that state and local taxes should be looked at together.  Kentucky is relatively low compared to the national average (ranked 40th) when looking at total state and local tax collection and Kentucky is also weak in revenue growth.  Dr. Fox outlined the following policy options:

  • Broaden the tax base and lower the rates in order to make the system more elastic and reduce behavioral distortions.
  • Enhance KY's competitiveness by shifting to more consumption and less to capital and labor taxation.
Dr. Fox goes on to discuss specific recommendations which you can find in slides 17 through 22 of his presentation.

There was a panel discussion on local government and local issues.  Participating in the panel were JD Chaney (KY League of Cities), Eric Kennedy (KY School Boards Association) and Judge Tommy Turner (KY Association of Counties).  As mentioned earlier, a main takeaway was that local governments are no longer going to focus on the LIFT approach but rather support broad constitutional authority for a local sales tax.  The panel agreed that if given the local option authority they would be willing to have a discussion on the repeal of other taxes, like the inventory tax that Governor Bevin has suggested he'd like to see repealed.  The group said that statewide, the inventory tax provides roughly 140M annually. KSBA mentioned that, if given the opportunity, they'd like to see a reform of the SEEK formula included in tax reform, but seemed to recognize that might not be feasible. Finally, in response to questions about streamlining procedures, local governments shared that they are not in favor of centralized collection.

There was also a panel with policymakers that included Senator Ralph Alvarado, Rep. Jonathan Shell, Budget Director John Chilton and moderated by Mark Sommer.  Sommer had several slides and they are available HERE.  

Sommer asked the group what tax reform / tax modernization actually means.  Several of the responses included looking at a code that has not changed in many years, moving away from a system where prosperity is taxed thereby placing KY at a competitive disadvantage, and including in the system the ability to reward and retain current industry/employers, in addition to creating a system that will attract new job. Sommer questioned whether lawmakers should look at treating for-profit medical systems the same as not-for-profit systems, specific to property tax and briefly mentioned the unfairness of the provider tax.  

In response to a question about the LLET tax, and how burdensome it is to small employers, Director Chilton explained that the state receives 80M in revenues annually from this tax.  Rep. Shell discussed the need to look at the sales tax exemptions and also talked about the need to phase down the income tax rates and explained that complete elimination would require too much of an increase in the sales tax - roughly 14% to 15%.  Senator Alvarado mentioned the possibility of taxing opioids.  Last session, there was legislation introduced to do this, however it did not move.  Rep. Shell ended the discussion by talking about the need for a broad look at tax reform and the need to shift ability and responsibility to local governments.

Juva Barber (KBT), Nick D'Andrea (UPS), and Laurie Maudlin (Appian in Indiana) were speakers for the panel on Infrastructure.  Barber outlined the need for additional infrastructure funding, to not only maintain the current system but also to address new projects.  She discussed the problems with funding improvements to Kentucky's roadways, but also the need to invest more in the other modes of transportation, specifically rail, aviation, waterways, and public transit.  She mentioned the KY Infrastructure Coalition, which has been formed to advocate for additional transportation infrastructure funding.  Maudlin talked about her involvement in the successful effort in Indiana to raise additional revenue for transportation.  She shared that their success began with being able to demonstrate to policymakers that all other options had been explored and that raising the gas tax was the only option left.  D'Andrea talked about the UPS decision to invest so heavily in Kentucky and that without adequate infrastructure that would not have happened, but that continued improvements are needed as well as mega projects like the Brent Spence Bridge.  D'Andrea discussed the successful Tennessee effort and explained that a big part of that success was being able to work with legislators to identify what projects would be addressed with the increased revenue.

There were also panels that included national organizations to discuss tax reform at the state level and at the federal level, with much of the same information that Jennifer Barber and Dr. Fox used in their presentations.

Friday, September 8, 2017


Commonwealth of Kentucky
Senate Majority Office

September 8, 2017
Contact: John Cox


FRANKFORT, Ky. (Friday, September 8, 2017) – The Kentucky Senate Majority Caucus announced Friday that Senator Jimmy Higdon (R-Lebanon) has been chosen by his peers to serve as the new President Pro Tempore in the Kentucky Senate. Senator Higdon replaces Senator David Givens (R-Greensburg) who resigned from his seat in Senate leadership in June citing personal reasons.

"I was sad to see Senator Givens step down, but I am honored to serve in this new capacity in Senate leadership, and I appreciate all of my colleagues for granting me this special opportunity," Senator Higdon said Friday. "I certainly have some big shoes to fill, but Senator Givens has been supportive, and I know he will continue to be a great asset to our caucus and a great resource to me moving forward."

Prior to Friday's election, Senator Higdon held the leadership position of Senate Majority Caucus Whip. A special election will be held in the near future to fill the newly vacant leadership post.

"I am happy for my good friend, Senator Jimmy Higdon, and look forward to continuing to serve with him in Senate leadership," Senate President Robert Stivers (R-Manchester) said. "Senator Higdon is experienced, knowledgeable, and possesses the necessary character skills needed to effectively serve as President Pro Tem, and I am confident he will do an exemplary job."

Senator Higdon was elected to the Kentucky Senate in 2009 during a special election after having previously served in the Kentucky House of Representatives since 2003. Senator Higdon was elected Majority Caucus Whip in 2014 and reelected in 2016. He represents the 14th Senate District, which encompasses Casey, Marion, Nelson, and Spencer counties, as well as a portion of Jefferson County.

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Monday, August 28, 2017

KY Public Pension Audit

The Public Pension Oversight Board (PPOB) met this afternoon in Frankfort.  Today's meeting was highly anticipated, with PPOB consultants presenting the third and final report outlining recommended changes to Kentucky's public pension systems. The report includes recommendations on changes to benefits and actuarial assumptions, but very little information on how to fund the changes. Members of the Kentucky House of Representatives will meet on Tuesday for a private briefing on the report.  

We expect the recommendations will be used as a guide, as policymakers develop a proposal seeking reforms to the various public pension systems.  Following today's meeting, Speaker Hoover issued a press release indicating that he and his colleagues will be seeking public input and that the PFM report is only a recommendation on how to proceed. The Governor and legislative leaders have indicated over the past few weeks that the special session will be called sometime in October. 

PPOB Meeting Summary

John Chilton, State Budget Director, began the meeting by presenting an overview of the problems facing the pension systems and the Commonwealth's budget. Chilton outlined the work of the Consensus Forecasting Group and the anticipated shortfall in FY 19 of roughly $200M.  He also reminded the committee that in the previous PPOB meeting it was determined that Kentucky would need an additional $700M per year in order to fully fund the ARC (actuarially required contribution).

Chilton went on to explain that the state needs an additional $1Billion and outlined three options:
  1. Cut spending
  2. Increase taxes
  3. Adjust benefits
Chilton discussed how spending on pensions and Medicaid have increased the past several years, as spending in other state agencies and programs have declined.

If no changes are made, K-12 education will be cut by $510M per year, from the annual current appropriation of $3.024B. This is an area that has generally been held harmless during previous budget cuts.  According to Director Chilton, without pension reforms, protecting vital government spending, like the SEEK formula, won't be an option.

Chilton also spent some time discussing the unfunded liability and what that number actually is. After talking through several ways to arrive at that number, they have chosen to use assumptions and rates used for private, non-government plans.  In doing so, the unfunded pension liability is $64B.  It's often been said through this process that the liability is anywhere between $30B and $80B.  

Following Director Chilton's opening presentation. the consultants - PFM - presented the final report and recommended changes to Kentucky's Public Pension Systems.  You can view the full reporHERE.  

To summarize, PFM recommends the following changes, as stated in the report:

All future Kentucky state and local government employees would have access to a balanced set of retirement benefits providing positive income replacement levels, including:
  • Social Security participation (not now available to teachers and many local government public safety employees)
  • Additional defined contribution (401K style) plans with significant minimum employer contributions and additional employer match
  • Retiree health care coverage consistent with that provided to active employees
All current KY state and local government employees would have the value of their accrued benefits maintained and receive benefits for future service as good as or better than those available for future hires.
All retired KY former employees would receive at least the same benefit level they were guaranteed upon retirement and would see significant improvements to the funding of their benefits - strengthening the solvency of these vital commitments.
In addition, all Kentucky stakeholders would begin to see steady and meaningful restoration of fiscal stability to the Commonwealth's retirement systems, with greatly reduced risk of renewed pension crises in the years ahead. In turn, this progress would ultimately lead to more resources available for critical investments and services, or fair employee raises going forward, and for improved financial health and credit strength 

Additional resources/slides from today's meeting:

Please don't hesitate to contact Rachel Bayens or Dustin Miller with any questions or concerns that you have. We will continue to keep you updated with information on the likelihood and timing of a special session.

Wednesday, April 26, 2017

Interim Calendar Released

The Legislative Research Commission released the 2017 Interim Committee Schedule calendar today and is attached or can be viewed HERE. The Interim Session begins June 1 and runs until December. The Interim Session is a time when House and Senate committees meet jointly to take testimony on issues for the upcoming session as well as get updates on bills that have recently passed. No formal action on bills is taken during the Interim, but it is a good time to educate legislators about issues in advance of the 2018 Session. Agendas for these meetings are generally announced in advance of these committee meetings and we will keep you informed on any issues of interest. 

Thursday, March 16, 2017

Bill Lists - March 15

From Government Strategies:

During the 2017 session of the General Assembly you can view the following bill lists updated nightly.

Education Bill List

Energy-Environment Bill List

General Business Bill List

Health Care Bill List

Health Insurance Bill List

Insurance Bill List

Transportation Bill List

Time For Recess - KY Legislative Update

The Kentucky General Assembly completed their 28th legislative day on Wednesday night, finalizing the bulk of its work for the 2017 Session. A few highlights on actions that took place the last two days:

- Charter Schools - House Bill 520 that would authorize charter schools was amended and approved in the Senate before the House approved those amendments and gave it final passage. The bill is now on the Governor's Desk. House Bill 471 that was amended to address funding for charter schools was approved in the Senate, concurred in by the House, and is now on the Governor's Desk.
- Education Reform - Senate Bill 1 that deals with standards review, aligned assessments and ESSA accountability passed out of the House with two floor amendments dealing with arts and advanced learners and those await final action in the Senate.
- Education Bills - Two other priority education bills received final passage and were delivered to the Governor: SB 107 (university board appointments) & SB 153 (postsecondary performance funding).
- Criminal Justice Reform - SB 120, a priority bill for this session that combines criminal justice reform and workforce development in the form of inmate re-entry, had minor amendments added before it passed the House. It will need Senate concurrence of those amendments.
- Nuclear Energy - SB 11, legislation that has been filed for many years finally passed both Chambers and has been sent to the Governor.  SB 11 lifts the moratorium on construction of nuclear power plants.
- Overweight Trucks - HB 184, sponsored by Rep. Suzanne Miles, is legislation to allow for the trucking transport of "metal commodities" which includes aluminum, to exceed current weight limits. The Senate Transportation committee approved a compromise on the legislation that was passed by the Senate and the House.

There were a few items of unfinished business that may be considered on the session's final two days March 29 & 30.

Wednesday, March 15, 2017

Ohio's restructured electricity market has cost households at least $1 billion

Ohio's restructured electricity market has cost households at least $1 billion since 2009, according to a new study by The Ohio State University's John Glenn College of Public Affairs. 
The report co-authored by Professor Noah Dormady, Glenn College doctoral student Zhongnan Jiang and Matthew Hoyt, an economic analyst at Exeter Associates finds that households in Ohio have never seen the benefits of competition, but have instead been forced to subsidize the losses of an aging coal fleet through a system of inflated riders and surcharges on their home electricity bills.

“Our findings stand in stark contrast to the competing analyses that have found mixed or favorable effects associated with retail restructuring,” said Dormady.   “We believe that much of this is due to the fact that the retail restructuring design of SB 221 created a perverse system by which commission intervention distorted true market-basis pricing…In essence, true retail deregulation never occurred in Ohio—and while wholesale prices declined, retail customers generally saw increasing total bills due to the regulated portion of their bill, that is riders and surcharges.”

To help reduce the incentives for utilities to inflate electricity costs to households and allow them to experience the intended benefits of competition the study provides important recommendations for correcting Ohio’s restructuring problems. Under the current system, customers have been overpaying for generation. They have been paying for generation through their energy costs, and they have been paying for generation through riders and surcharges on their monthly bills.

To read the full report go to For more information contact Dr. Noah Dormady at 614-688-1668 or email him

Bill Lists - March 14

From Government Strategies:

During the 2017 session of the General Assembly you can view the following bill lists updated nightly.

Education Bill List

Energy-Environment Bill List

General Business Bill List

Health Care Bill List

Health Insurance Bill List

Insurance Bill List

Transportation Bill List

Monday, March 13, 2017

Kentucky joint action agency adding renewables

Kentucky joint action agency adding renewables
Platts Megawatt Daily
March 13, 2017

A Kentucky joint action agency formed less than two years ago is looking to build upon its roughly 300-MW generation portfolio by adding 50 MW of renewable energy to the mix by the time a longstanding wholesale power arrangement with Kentucky Utilities ends in May 2019.

So far, the 10-city Kentucky Municipal Energy Agency has signed power purchase agreements for
mostly coal-fired generation with Big Rivers Electric, Dynegy and the Paducah Power System.

The Dynegy power will come from the Houston-based merchant generator's 1,100-MW Joppa baseload plant in far southern Illinois. Joppa was one of five power plants totaling 4,100 MW acquired by
Dynegy from St. Louis-based Ameren in 2013, as part of the latter's exit from the competitive power business.

Terry Naulty, KyMEA's treasurer who doubles as general manager of Owensboro Municipal Utilities, said in a Friday interview the joint action agency hopes to use wind or solar energy to balance out its heavy fossil fuels portfolio.

Member cities "want to evaluate whether or not there's a cost effective way to integrate renewables into the supply portolio," he said.

KyMEA issues RFP for renewables
To that end, KyMEA, in the heart of a traditional coal-producing state where coal still is used to generate more than 80% of its electricity, has released a formal request for proposals for 50 MW to 250 MW of renewables. However, it is likely to buy only 50 MW for now. The deadline to submit proposals is 2 pm ET on April 12. The solicitation seeks renewable capacity and energy resources for as long as 20 years.

In addition to Owensboro, the commonwealth's third-largest city behind Louisville and Lexington, KyMEA members include the cities of Barbourville, Bardwell, Benham, Corbin, Falmouth, Frankfort, Madisonville, Paris and Providence. With the exception of Owensboro, all are full-requirements members of the group.

The cities agreed several years ago to terminate the KU contract after the parties were unable to reach an agreement on an extension. KU, the state's largest electric utility, is a sister utility to Louisville Gas
& Electric, and both are owned by Pennsylvania's PPL. For now at least, Owensboro is a self-supporting member, operating the 425-MW Elmer Smith coal-fired generating station.

OMU's board of directors is expected to decide on Tuesday whether to keep running Smith as a coal plant for longer than the next two years. One of the plant's two units already is ticketed for retirement following the summer of 2019.

Sierra Club wants coal burning to stop
The muni is considering several options, including closing the second unit in 2022 or 2023, constructing gas-fired generation or adding renewables.

The Sierra Club is pushing the city to halt coal burning altogether at Smith by early next decade and use renewables to replace it. "We've got to help convince them it would be a financially wise thing to do," Aloma Dew, a Sierra Club member from Owensboro, said in a Friday interview.

But, "I don't feel real optimistic," she acknowledged. "Right now, gas is so cheap and they think it's going to be that way forever." That kind of thinking is not good for the state, she said. "Kentucky gets left behind on a lot of things because we're so hesitant to change."

Dew, nevertheless, applauded KyMEA's decision to incorporate more renewables in its portfolio.

Naulty said he does not know what the OMU board will decide on Smith.

KyMEA's business model, meanwhile, appears to be gaining popularity with other Kentucky cities and public power agencies. "We have been approached by several other public power entities to talk about synergies with KyMEA," he said, adding no final agreements have been reached.

— Bob Matyi

Monday, February 27, 2017

Support SB 214: Needed to Address Unfair Renewable Energy Subsidy

Senate Bill 214  amends Kentucky’s net metering laws to accomplish three things:
1. Increase net metering cap from 30 kilowatts to 1000 kilowatts
2. Grandfather existing customer generators
3. Change the allocation of costs among net-metering customers and all other customers to address an unfair cost shift relating to fixed costs to maintain the state’s collective grid.

What is Net Metering?
Net metering is a system under which privately-owned solar panels or other renewable energy generation is connected to a public-utility power grid and surplus power is transferred onto the grid, allowing customers to offset the cost of power drawn from the utility.

Why are these statutory changes needed?
- Under Kentucky’s existing net-metering law, all utility customers are subsidizing net metering customers.
- Current net-metering law requires host utilities to overpay for excess energy from the private net-metering facilities by crediting customer-generators at the “full retail rate” (cost of energy, plus costs to build and maintain the infrastructure to deliver the energy) for the excess energy they supply.
- The payment of the full retail rate by utilities to net-metering customer generators means that they avoid paying the costs all other utility consumers pay for the infrastructure of the electric grid.
- Kentucky’s electric utilities have been in discussions with supporters of net-metering for several years and have offered to help grow the industry (raise the cap from 30kW to 1 mW) and grandfather in existing customer-generators, in exchange for the opportunity to better align costs/eliminate a subsidy.

Impact of this Legislation
1. SB 214 would resolve the unfair subsidization of renewable energy by allowing electric utilities to utilize the ratemaking process at the Public Service Commission to more fairly allocate system costs between net-metering customers and all other customers.
2. SB 214 will not impact the approximately 500 existing customer-generators, as they are grandfathered under the bill and not affected by any proposed change in the allocation of system costs to be considered by the PSC.
3. SB 214 will positively impact economic development efforts by making possible larger renewable energy projects for large commercial and industrial customers who require access to renewable power as part of their corporate mandates or site selection criteria.
4. SB 214 does not apply to TVA or Kentucky electric utilities not regulated by the PSC.
Who Supports SB 214 ?
Kentucky’s Electric Utilities regulated by the PSC
Kentucky Association of Manufacturers
Kentucky Chamber of Commerce
Consumer Energy Alliance

VOTE YES on SB 214!