The Kentucky General Assembly is under pressure to confront some worsening problems that it previously has avoided when it returns to Frankfort on Tuesday for the 26 remaining work days in this shorter, odd-year legislative session.
One such problem is the heroin epidemic that's causing hundreds of Kentucky overdose deaths and thousands of property crimes by addicts desperate for cash. Another is the state's ailing public pension systems, which are many billions of dollars short of what they're expected to need for future payouts. Other issues resurfacing this winter include protective orders for dating partners and phone service deregulation long desired by AT&T.
Lawmakers say they expect to cover a lot of ground between now and March 24, when they're scheduled to adjourn.
"We've proven that, despite the partisan differences in the General Assembly, we can come to agreements on big issues," said Senate Majority Leader Damon Thayer, R-Georgetown. "I do think there's an opportunity here to continue that momentum."
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Here are seven of the biggest issues to watch:
The Senate quickly passed a heroin measure — Senate Bill 5 — during the four days that lawmakers met in January. The bill would require longer mandatory prison sentences for people convicted of trafficking in any amount of heroin, and it would divert millions of dollars to expand treatment options for heroin addicts in local jails and community mental health programs.
SB 5 also would make it easier for police, firefighters and paramedics to carry naloxone — a drug that can reverse the effects of a heroin overdose — and it would establish a "good Samaritan" rule to encourage drug users to report an overdose in exchange for deferred prosecution on related drug charges. Police say some heroin users don't call an ambulance for their overdosing friends because they're scared of going to jail.
Rather than act on SB 5, House leaders expect to file their own heroin bill this week. This could complicate matters — again. In 2014, the Democratic-led House and the Republican-led Senate failed to compromise on their competing heroin bills. After intense negotiations, the Senate's bill died on the House floor in the final moments of the session.
Kentuckians won't be pleased if lawmakers keep dithering on this issue, said Sen. Chris McDaniel, R-Taylor Mill, the sponsor of SB 5 and a candidate for lieutenant governor on a slate with Agriculture Commissioner James Comer.
"When it comes down to who gets credit for the legislation, we may as well ask the overdose victims in their graves if they care and if it was worth it to them that we didn't pass a heroin bill a year ago because we couldn't decide," McDaniel said.
House Judiciary Chairman John Tilley, D-Hopkinsville, said his chamber's heroin bill "will have more in common with the Senate bill than it does differences." But there likely will be differences, including the possible allowance of needle exchange programs for addicts to reduce the risk of transmitting HIV and hepatitis C and to protect the public from discarded needles. Some conservatives oppose needle exchange programs.
Tilley said the House bill also might clarify what's meant by "heroin trafficking." The Senate's bill would require five- to 10-year prison sentences for "small-time peddlers," who would have to serve at least half the sentence before parole, he said.
"Sometimes there's a difference between someone who is peddling a small amount of heroin to support his habit, like a gram, and someone who is trafficking to make a profit," Tilley said. "We really do want to differentiate. In the 1980s, we were rounding up people as cocaine traffickers because they had residue and paraphernalia, and all that really accomplished, unfortunately, was clogging our prisons."
The state operates two huge pension funds: Kentucky Retirement Systems, which covers nearly 350,000 state and local government employees and retirees, and Kentucky Teachers' Retirement System, which covers nearly 150,000 active and retired educators.
The state didn't contribute as much to the funds as it was advised to in many past years. Consequently, the funds are billions of dollars short of what they are expected to need as the current generation retires and collects its guaranteed lifetime pensions and health coverage.
This shortfall could lead to a financial calamity. By law, those pensions must be paid, making everything else the state funds — from schools to Medicaid — a potential sacrifice. Even now, the unfunded pension liability damages the state's credit rating and makes it more expensive for Kentucky to borrow money.
As it happens, borrowing money is the proposed solution for one pension fund. KTRS has convinced House Speaker Greg Stumbo, D-Prestonsburg, to sponsor a bill that would authorize $3.3 billion in bonded debt, so the state can afford to make its full recommended contribution to the teachers' system for eight consecutive years.
Stumbo's bet: KTRS could borrow the money from investors at no more than 5 percent interest and then get its own investment return of greater than 7 percent, clearing a profit. This assumes that interest rates don't rise in the short term and the stock market does not slump over the long run.
"It's like taking out a second mortgage on your house and hoping you can at least beat the market on whatever investments you make with the money you borrow," Stumbo explained to reporters in January.
Stumbo's pension proposal (House Bill 4) is getting a chilly advance reception in the Senate. Reopening the state budget to authorize bonds in a shorter 30-day session would require a three-fifths supermajority vote in both chambers.
"I don't think a compelling case has been made yet to borrow $3 billion," said Thayer, the Senate majority leader. "There's been no talk of any structural changes at KTRS like the ones we made to KRS two years ago. There would have to be structural changes."
In 2013, the General Assembly addressed KRS' shortfall by committing to make full contributions in coming years — a commitment it so far has honored — and shifting new state government hires to a less generous pension plan. Among other cutbacks, the legislature required larger employee contributions and longer service before retirement. Even so, the chief pension fund for state workers is only 21 percent funded.
Gov. Steve Beshear, among others, is renewing the call for a bill that expands the scope of court-issued civil protective orders to dating couples — people who have not been married, lived together or shared a child. However, dating violence bills have failed in the legislature for years. Some legislators have opposed the expansion, arguing that dating partners can seek protection from violence under existing criminal law.
Tilley said he will try again next week by filing a House bill to create an entirely new chapter of Kentucky law focused on civil protective orders, rather than attempt to shoehorn dating couples into the existing domestic violence chapter.
The bill also would add stalking as an offense covered by protective orders, he said. In cases involving high school students, school officials and judges would be given "a lot of discretion" on how best to keep students apart, Tilley said.
"We're sadly the last state in the country now to offer these protections," Tilley said.
For the last four years, AT&T pushed the General Assembly to largely strip the Kentucky Public Service Commission of its oversight of local phone service. The company says it wants to shift its financial resources away from "outdated" land lines — which, as a protected monopoly, it is required to maintain in assigned territories — in favor of modern wireless technology. AT&T spent $169,006 in 2014 alone to lobby lawmakers in Frankfort.
Yet the so-called "AT&T bills" kept failing, in part because of consumer-protection concerns, and in part because powerful House Speaker Pro Tem Larry Clark, D-Louisville, adamantly opposed the company's efforts.
Now that Clark has stepped down from House leadership, AT&T is making another push. This winter, there are two AT&T bills (HB 152 and SB 3) with 22 bipartisan co-sponsors between them. They would end the obligation of the major phone carriers — AT&T, Windstream and Cincinnati Bell — to provide basic phone service in urban areas. They instead could provide phone service through a wireless plan or an Internet protocol-based technology, which converts voices into a digital signal that travels over the Internet and then reconverts it at the other end.
Rural customers could ask to stick with their land lines, but the companies would not be required to extend basic service to new developments.
The loudest critic of the AT&T bills, Tom FitzGerald, an environmental and consumer attorney, said this year's versions remain flawed. The PSC would lose its authority to investigate most consumer complaints about telecommunications service, FitzGerald said, and cheap, reliable phone service could disappear across much of Kentucky.
"The loss of universal access to basic, stand-alone phone service in larger exchanges, for new and existing customers, will disproportionately affect low- and fixed-income customers," FitzGerald said.
Thanks to an international oil glut, gas prices have plummeted to close to $2 a gallon.
While cheap gas is terrific for drivers, it's bad news for Kentucky's Road Fund, which partly relies on a 9 percent tax on the average wholesale price of gas sold at the pump. The wholesale price and gas tax are figured quarterly. After the last two quarters, Kentucky's gas tax has dropped 4.3 cents per gallon, erasing an estimated $129 million that state and local officials thought they would get to spend on road projects.
Senate Transportation Chairman Ernie Harris, R-Crestwood, thinks he has an answer. Harris' SB 29 would lock the average wholesale price where it sits at present, at $2.35 a gallon, rather than let it drop to the statutory floor of $1.78, a price that suddenly looks more possible than it used to.
Harris acknowledged that some lawmakers have pledged to never vote for a tax increase, no matter the impact on public services. But technically, this plan wouldn't raise the gas tax, he said, it just wouldn't let the tax drop any further.
"I think this can be explained, especially once members realize what's going to happen to the road projects in their cities and counties without it," Harris said.
Lexington's two senators — Alice Forgy Kerr, a Republican, and Reginald Thomas, a Democrat — are sponsoring a measure to cap at 36 percent the interest rates that payday lenders can charge for their small, short-term loans.
Under Kentucky law, a $500 payday loan made for two weeks can cost an extra $89 in "finance charges," for an annualized interest rate of 465 percent. The borrower faces additional costs if she cannot fully repay the loan and instead has to roll it over for another two weeks, which is a common practice.
"The way payday lenders operate now, they're like a leech sucking the lifeblood out of their customers," Thomas said. "That's not just unhealthy for the consumer, it's unhealthy for our society, because we have people who get trapped in all this debt and can't find any way to escape it."
However, similar efforts to cap interest rates on payday loans have failed in the past. The Kentucky Deferred Deposit Association and several of the larger loan companies spent more than $151,000 in 2014 to lobby the General Assembly. The industry also has given tens of thousands of dollars in campaign donations.
Senate Banking and Insurance Chairman Tom Buford, R-Nicholasville, said his committee might allow the payday loan bill a hearing this winter, to discuss the issue, but probably not a vote. Payday lenders provide a necessary service, Buford said, because customers tend to be people with bad credit histories who would not be welcomed into a bank for a loan, assuming the bank even wanted to make a $500 loan.
"The 36 percent cap would get rid of payday lending, it would close them out of the state of Kentucky," Buford said. "There are people who need these loans for things like car payments, for rent, for doctor's bills."
UK research building
The University of Kentucky wants lawmakers to approve $10 million a year in bonding authority for 20 years so it can build a "multidisciplinary medical research center" to study cancer, heart disease, diabetes and other diseases afflicting Kentuckians. The center would be built along South Limestone in Lexington, near the UK College of Pharmacy,
Senate President Robert Stivers, R-Manchester, made an impassioned plea for the project in a Senate floor speech in January, before the General Assembly took a three-week break. Stivers said UK considered the research center its top priority during state budget negotiations last year, but it did not make the final cut. Since then, UK President Eli Capilouto has lobbied state officials to reopen the budget and approve the bonds, which would be supplemented by private donations.
Stivers estimated the final cost of the project to be in the range of $130 million to $150 million. In his floor speech, Stivers noted that both of his parents and several of his Clay County friends have been treated for cancer at UK. The proposed center would be a valuable addition to the university's medical complex, he said.
"I sometimes say that if you want to campaign in my district, but not be in my district, the best place to go is Markey Cancer Center," Stivers said.