KY lawmakers approve bills spending more than $1.25 billion in final hours of session

Kentucky lawmakers kicked off the final day of this year’s legislative session Tuesday by unveiling a spending bill that allocates more than $750 million to pay off the state’s unemployment insurance debts, fund full-day kindergarten and give additional money for rural broadband access.

A revised version of House Bill 382 was the first of several bills allocating both state and federal money before the session is constitutionally required to end by midnight. Entering the day, the legislature still had more than $2 billion in federal money to potentially allocate from the American Rescue Plan Act, which Congress approved earlier this month.

Just before 5 p.m., the House unveiled a plan to spend another $250 million of the federal relief money on a grant program for drinking water and wastewater infrastructure. A little later, the Senate approved two other bills spending another $250 million on construction and renovation projects.

Sen. Chris McDaniel, R-Taylor Mill, the chairman of the Senate budget committee, said early Tuesday that lawmakers would likely allocate more money before the day ended, either from federal funds or the state’s General Fund. But he said it is unlikely lawmakers will appropriate all of the more than $2.4 billion the state is expected to receive from the federal government and hopes Beshear will call them into a special session to deal with that money later this year.

Crystal Staley, a spokeswoman for Gov. Andy Beshear, said the Democratic governor would carefully review all of the bills lawmakers passed Tuesday.

“With lawmakers making substantive amendments to some legislation in the final hours of the session, Gov. Beshear and his team will review the final version of each bill over the next 10 days, decide what is in the best interest of Kentuckians and act accordingly,” Staley said.

Senate Minority Floor Leader Morgan McGarvey echoed McDaniel’s statement that a special session may be necessary to allocate the rest of the federal money.

“We’re still waiting on the exact guidelines from the federal government for how to spend the American Rescue Plan money,” McGarvey said. “We could get that and it’s possible that we would still need a special session.”

Kindergarten, broadband and unemployment debts

HB 382, which originally dealt with funding regional development agencies, now contains $140 million in funding for full-day kindergarten, fulfilling a promise to lawmakers who voted to approve House Bill 563, a controversial school choice bill. While most districts in the state already have full-day kindergarten, this would have the state pick up the expense, allowing school districts that already spend money on full-day kindergarten to spend it on other programs.

The new version of the bill cleared the General Assembly around 6:20 p.m. Tuesday.

The new revenue bill also allocates $575 million of the federal relief money to pay off the state’s unemployment insurance debts. The state’s debts had topped $500 million in January and have only increased in the time since. Without this aid, the state’s businesses would have to pay higher unemployment insurance taxes.

McDaniel said the unemployment spending is supported by the governor and the legislature.

“This is something we absolutely, 100 percent, are in complete agreement with the governor on,” McDaniel said.

The bill also provides an additional $50 million for rural broadband in the current fiscal year. Earlier in the session, the legislature passed House Bill 320, which allocated $250 million in federal money to spend on rural broadband access, but only $50 million of that could be spent in the next year.

It also would move oversight of state broadband efforts from the Public Service Commission to the Kentucky Infrastructure Authority.

Other money allocated in the bill includes:

▪ $842,400 for the Office of Kentucky Nature Preserves from restricted funds and federal funds;

▪ $50,000 for the Kentucky Heritage Council for the Kentucky African American Heritage Commission from the state’s General Fund;

▪ $1.8 million to establish the Northern Kentucky Regional Medical Examiner’s Office from the judicial budget and another $1.5 million for the operations of the office.

Water projects

Tuesday evening, the House budget committee gutted Senate Bill 36, which had dealt with juvenile justice, and allocated another $250 million of the federal relief money for a drinking water and wastewater grant program. The Kentucky Infrastructure Authority will oversee the program. The full House approved the revised bill just before 6:30 p.m. and the Senate gave it final approval around 9 p.m.

All 120 of Kentucky’s counties will split about $150 million, with the amount determined by the population of the country. The only exception is Jefferson County, which will have its share discounted by 50 percent. Another $50 million will go to provide drinking water services to “unserved rural customers” and counties that are under a federal consent decree with the Environmental Protection Agency.

The bill gives a little under $50 million to supplement existing project grants. A second section of the bill deals with how the Department of Corrections pays mental health, substance abuse and reentry centers for the use of some of the beds in those centers.

House budget chairman Jason Petrie, R-Elkton, said the Beshear Administration had agreed to the new language.

Construction and renovations

The General Assembly passed at least two more new spending bills Tuesday evening, including House Bill 556, which allocates $53 million of the federal stimulus money for renovations to the interior of the Capitol Building, including mechanical, electrical and plumbing upgrades.

The bill appropriates $127 million of the federal money for school facility construction costs and $75 million from the state’s General Fund for renovation costs at local area vocational education centers.

HB 556 would also give $10 million to the West End Opportunity Partnership in Louisville if the partnership can raise $20 million from investments. It gives $37 million in federal funds to the Justice and Public Safety Cabinet to provide grants to limit the spread of COVID-19, $20 million to rural hospitals in a revolving loan fund and $14.7 million to provide technology upgrades in county jails.

The revenue measures were added to the original bill, which deals with rural hospitals and has language to create the Harrodsburg Sestercentennial Commission.

House Bill 321 deals with language from an earlier revenue bill that provided a tax break for a planned renovation of the Seelbach Hotel in Louisville. The new language limits the tax break to just one application, so other hotels can’t get the same tax break as the Seelbach. It also would set up a tax-increment financing district in West Louisville that works in coordination with the money allocated in HB 556.

This story was originally published March 30, 2021 at 10:58 AM.