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Monday, March 26, 2018

Johnson Elementary Money in Jeopardy

There are always surprises in legislative sessions. But one safe assumption when a state budget must be approved is that Kentucky Senate and House members will form a committee late in the session to iron out differences between each chamber’s preferred state spending plan.

That’s what happened this week as Senate and House members created a conference committee in the hopes of reaching an agreement on Kentucky’s next two-year budget before a legislative recess that’s scheduled to start on March 29.

While many parts of the two chambers’ budgets are in agreement with each other, there are notable differences in each chamber’s spending priorities.

One item that was left out specifically of the Senate budget was the line item appropriation of funding for Johnson Elementary.

Earlier this month, the house approved a budget that included $10,887,400 for Johnson Elementary Schools that would be paid through the School Facilities Construction Commission. They also approved $7,650,300 for Menefee County Schools for Menefee Elementary School.

RELATED: $22.5 Billion State Spending Plan Passes House, Moves to Senate 

State House Representative, Joe Fischer, who represents Fort Thomas in Frankfort thanked House Appropriations and Revenue Chair Steven Rudy, R-Paducah, for including the Johnson Elementary line item.

"Thank you, Chairman Steven Rudy, for graciously acceding to my persistent requests to include funding for Johnson Elementary in this year's austere budget," said Fischer. "The last time (the) Kentucky House Republicans wrote a budget was the year Johnson Elementary was originally constructed (1922)."

The Senate removed that language for both of the schools.

Sen. Wil Schroder, who represents Fort Thomas in the Senate said that the Senate's version of the budget still placed a commitment on education. He said that while the money specified for any school was removed from the Senate budget, there would be some money for Johnson through the opening up of money through additional bonding.

"With the costs of pensions consuming 14% of the budget, this year's budget is one of the the toughest ever seen in Kentucky. I was thankful that my Senate colleagues understood the importance of extending the equalization language which will help communities like Fort Thomas with school facilities projects. This change will mean an additional $5.5 million in bonding capacity for Johnson Elementary,” he said.

Sen. Wil Schroder. LRC. 
Obtaining equalization money was one of the strategies Fort Thomas stakeholders employed to be able to get the funding necessary for a $22 million school, but the ultimate prize would have been getting money specifically allocated through this year's budget.

With $5.5 million dollars already in the district coffers earmarked for Johnson construction, the additional bonding gets the district to $11 million dollars, but with just half of the total money needed to complete the project, it's not clear what will happen next.

The next budgeting cycle in Frankfort will be in 2020.

So, what's next?

The Chairs in the House (Rudy) and Senate (McDaniel), along with Leadership, are currently going through a differences document between the House and the Senate’s versions to see where they can find common ground and make the case for different funding and revenue decisions.  There is no definite timetable for when the conference committee will iron out a final compromise, but sources tell Fort Thomas Matters that legislative leaders are hopeful they will reach an agreement before the Governor’s 10-day veto period, so they can preserve their legislative independence and override a gubernatorial veto if they see fit.

Other than funding allocation for Johnson Elementary, among the questions conference committee members are confronting are:

·         How much should the budget depend on possible new revenue sources? The House plan made spending decisions based on the possibility of new revenue sources, most notably a proposed 50 cents per pack increase in the cigarette tax and a 25 cent per dose tax increase on prescription opioids at the distribution level. The Senate plan is not based on any tax increases.

·         How should increases in funding for public pension systems be prioritized? Compared to the House plan, the Senate plan directs a larger percentage of its pension funding to the least-funded systems -- the state employee’s system and the police system – than to the teachers’ retirement system, which would still be funded at levels required by statute.

·         Where should spending cuts be made? The Senate plan restored some, but not all, of the cuts to state agencies, including universities, that were proposed in the governor’s original budget proposal. The House plan included less spending cuts and would have spared most university funding.

These are just several among a range of complex budget issues that lawmakers will work on resolving in the days ahead. Their goal is to agree upon a budget early enough that they’ll still have a chance to override vetoes, if the governor casts any, before the session ends.

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