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Kentucky Senate’s two-year state budget earmarks $15 million for proposed research lab in Covington

By Jack Brammer
NKyTribune reporter

The Kentucky Senate approved a two-year state budget Wednesday that contains $15 million for a proposed life science research lab in Covington, a project designed to make Northern Kentucky a focal point of life-saving biotechnology research.

Covington Mayor Joe Meyer was elated by the Senate action.

“We’re delighted that the Senate sees the merit of this project,” said Meyer. “It’s a significant economic development opportunity for the entire Northern Kentucky region.”

NKY’s Sen. Chris McDaniel was head of the budget committee that recommended the budget to the Senate.

The amount for the lab in the budget the Senate passed on a 30-6 vote was $5 million more than what Gov. Andy Beshear proposed in his budget plan in January. The state House did not include the proposed lab in its budget plan.

The Senate’s higher amount for the lab indicates that it believes the project is worthy and it wants to show its strong backing for it.

The Senate’s version of the budget bill, House Bill 1, now goes back to the House for its consideration. If the House does not accept it, the two chambers will appoint members to a so-called free conference committee, which will try to iron out differences between the two chambers. The committee will have the freedom to make any additions or subtractions.

Once both chambers have agreed on a budget, it will go to the governor, who has the power to make line-item vetoes but cannot make any additions.

The House and Senate, controlled by Republicans, can easily override any vetoes by the Democratic governor. The legislature cannot run past April 15.

Sen. McDaniel said he hopes the conference committee on the budget can start its work next week.

Though the final decision has not yet been made on how much state money the lab proposal will get, the Senate’s action gives it a strong push to become a reality.

The Senate’s 223-page budget document says: Included in the above General Fund appropriation is $15,000,000 in fiscal year 2022-2023 to be distributed to regional economic development authorities to support the construction and fit-out of a wet research lab facility located in the city of Covington.

Beshear strongly supports the project. He said the investment will support the many life sciences and biotech companies already in the region and will welcome new innovators and startup companies to create more high-wage jobs and cutting-edge treatments in Kentucky.

Sen. Chris McDaniel

Besides the city of Covington, the lab project has the backing of Northern Kentucky University and four nationally renowned biotech firms in the city.

They are Bexion Pharmaceuticals, which is working on a cancer drug; Gravity Diagnostics, which has gained national attention for its work during the coronavirus pandemic; CTI Clinical Trial and Consulting Services, which specializes in rare diseases, cell and gene therapies; and BiOWish Technologies, which develops commercial projects in agriculture and environmental markets.

The proposed lab would contain about 10,000 square feet and have room for about 15 start-up companies. It would be built on land contributed by the city on a site to be named.

Also in the Senate budget bill is a provision to allow any money not spent from the $1.8 million in this year’s state budget to re-establish the Northern Kentucky regional medical examiner’s office to be carried forward and used for the office.

The Senate budget also includes $200 million in The Road Fund to provide state matching for megaprojects, such as the proposed companion to the Brent Spence Bridge between Covington and Cincinnati.

In other news about the Senate budget, Kentucky Today’s Tom Latek reported:

McDaniel has been involved in several budgets during his time in office, said, “This is the first time in those budgets that the entirety of growth revenue was not consumed by pensions and Medicaid. We had the ability this year to fund additional priorities in the Commonwealth, and we took a very conservative yet measured approach to those priorities.” 

He said the top priority was a pay hike for state employees. “The state’s workforce, for the last 15 years, has been largely without any kind of a raise. There have been targeted raises throughout that time but, by and large, there have been no across-the-board increases.”

McDaniel says there will be an average 10% pay raise each year. The first year it will be $4,500 for each employee, so those making less than $45,000 will see slightly more than 10%, those earning more will have slightly less. The second year, the Personnel Cabinet will be required to perform a locality and positional study, to ensure the money is appropriately allocated across the workforce.

Other provisions include a $15,000 raise for State Police troopers, while social workers would receive a $4,800 increase each year, plus a 10% raise in the second year. It would also direct the Cabinet to develop a program to rotate social workers to a one-year inside position after four years on the front lines, to give them a mental break, according to McDaniel.

Additional staffing would be provided to the State Medical Examiner’s office, including technicians.

For the schools, SEEK funding per student would be $4,100 the first year and $4,200 the second, while institutions under the Council on Postsecondary Education will receive the same base funding, but $87 million has been added to the performance-based funding formula.

The public employee pension systems will receive the actuarially required full funding while adding an additional $250 million to the State Police Retirement system.

An additional $4 per day per person increase would go to county jails that are housing state prisoners.

A non-profit grant pool of $75 million would be established, with each grantee receiving up to $75,000 to make up for losses incurred during the COVID-19 pandemic.

A total of $250 million is earmarked for repairs to the Capitol, over a six-year period, including the replacement of the HVAC system.

A total of $250 million is earmarked for a complete overhaul of the Kentucky State Park System.

The measure allocates funding to the Budget Reserve Trust Fund, otherwise known as the Rainy-Day Fund, so at the end of the two years it would stand at $1.75 billion. Unappropriated money is $1.278 billion.

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