A nonprofit publication of the Kentucky Center for Public Service Journalism

NKY fares well in state budget expected to pass; Cov research lab, Brent Spence survive — and more

By Jack Brammer
NKyTribune reporter

With this year’s Kentucky General Assembly winding down, state lawmakers on Tuesday approved money for a startup life science research lab in Covington, the Brent Spence Bridge project, and full-day kindergarten, raised salaries for state workers, and changed the state’s income tax.

Wednesday is the scheduled last day to pass bills in the 2022 law-making session.  Lawmakers are to recess until reconvening April 13 and 14 to consider any vetoes by Democratic Gov. Andy Beshear.

A flurry of bills received action Tuesday.

Sen. Chris McDaniel

Most prominent was House Bill 1, the $16 billion state budget for the next two years.

A committee made up of legislators from the House and Senate unveiled a budget compromise that ironed out differences between the two chambers’ spending plans.

The bill is expected to win approval from both chambers. It then will go to Beshear, who can veto parts of it, but the Republican-led legislature is likely to override his vetoes.

Northern Kentucky projects

Northern Kentucky fared well in the House-Senate budget.

Covington research lab

It calls for $15 million for a proposed research lab in Covington that is designed to put Northern Kentucky on the map for life-saving biotechnology research.

Beshear had proposed spending $10 million on the project while the House declined to fund it. The Senate earmarked $15 million for it and that amount survived in Tuesday’s House-Senate compromise.

Covington Mayor Joe Meyer

Asked how the project got more money than Beshear had proposed, Senate budget chair Chris McDaniel, R-Taylor Mill, said, “There was just a generalized feeling among the stakeholders that it could be conceivably more than a $10 million appropriation and we wanted to make sure the money was there.

“That kind of research is critical to developing an environment for advanced biotechnology and we wanted to make sure we got it right.”

Covington Mayor Joe Meyer said in an email, “We’re excited by the news, and appreciative of Sen. McDaniel and the other Northern Kentucky legislators who worked on our behalf to secure the funding for this life sciences lab.

“This is a critical hurdle in what we think will be a transformational project for the economy of not just Covington but the entire region, not to mention the life-saving and earth-shattering work that will be done in the realms of medicine and science.”

Meyer noted that the city had partners in trying to land the lab, including CTI, Bexion Pharmaceuticals, and Gravity Diagnostics.

Beshear spokeswoman Scottie Ellis said, “To attract the jobs of the future, the governor’s budget funded the construction and fit-out of a shared research and development lab facility to serve the expanding life sciences research sector in the Northern Kentucky region.

“The inclusion of this economic development initiative in what appears to be the final budget is positive news as the Commonwealth continues to see ongoing economic growth and, as the governor has stated, now is the time to invest to ensure this momentum continues for years to come.”

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.

Three major road projects, including Brent Spence

The House-Senate budget, McDaniel said, also transfers $250 million from the General Fund to the Road Fund to pay for three major infrastructure projects in the state.

They are a companion bridge to the Brent Spence Bridge over the Ohio River between Covington and Cincinnati, more expansion of the Mountain Parkway in Eastern Kentucky and a new I-69 bridge between Henderson and Evansville, Ind.

The state money for the Brent Spence Bridge project is in addition to Kentucky’s efforts to get federal dollars for it.

Full-day kindergarten

The House-Senate budget provides money for full-day kindergarten. Beshear had recommended that but the legislature did not accept his request for funding pre-kindergarten for 4-year-olds.

It also increases the basic funding for school districts – called SEEK – from $4,000 this year to $4,100 next year and $4,200 the following year and earmarks $7.8 million for mental health professionals in schools.

State worker pay

State workers will get an 8 percent raise in the first year of the two-year budget and a 12 percent raise in the second year. A review of state pay by the Personnel Cabinet will determine the actual amount paid.

Some state workers in highly demanding jobs like social workers, state police, and public advocates will get more pay.

Non-elected employees in the judicial branch will get a $2,000 hike in the first year, as well as the 8 percent and 12 percent raises.

Other budget items

The compromise budget calls for full funding for public pensions and more money to decrease the unfunded liabilities of the state’s pensions systems.

It has $75 million for tourism-related grants and $150 million to upgrade the state’s parks.

McDaniel said state parks “are fairly antiquated in their amenities and we are directing” the state parks department to review its needs and make recommendations to the legislature next year, “ideally involving some private sector and local partners.”

Kentucky State University, the historically black university in Frankfort, is to receive $23 million to help it get out of a deficit, plus $15 million to the Council on Postsecondary Education to oversee the university’s finances.

McDaniel warned the school that “this is the last lifeline from the General Assembly.”

Also in the budget is $40 million a year for Kentucky Wired, a public-private partnership to provide broadband access ­across the state and $1.75 billion for the state’s “rainy day” fund for emergencies.

McDaniel noted that a variety of new projects in 60 to 75 counties were added to the compromise, including firehouse renovations, industrial sites and jails to install communication equipment for arraignments.
The compromise budget does not include the House’s request of $10 million a year so each lawmaker could use for projects in their home districts.

McDaniel also said his bill to provide relief for Ukrainian refugees is languishing in a committee, indicating that it may not win legislative approval.  He has proposed providing grants of up to $10,000 for up to 5,000 refugee families who have been displaced by international conflict.

Tax changes

The Senate approved a tax reform measure Tuesday afternoon on a 27-8 vote a few hours after it had cleared its budget committee.

McDaniel said the new version of House Bill 8 was a compromise between the House and Senate.

The House’s initial plan was to drop the state personal income tax from 5 percent to 4 percent, beginning next year, and eventually getting it to zero over four to eight years by lowering the rate incrementally based on certain triggers.

The new version of HB 8 changed the conditions for lowering the tax rate, saying the rate could drop by 0.5 percent if by year’s end revenues collected exceed spending.

These decreases could only occur if at least 10 percent of receipts go into the “rainy day” or budget reserve fund. The General Assembly would have to vote to allow the first lowering of the rate.

Also, a list of services to be subjected to the state’s 6 percent sales tax deleted financial services, travel agencies, and boat docks. Remaining were several others, including non-medical cosmetic surgery, telemarketing, photography, massages, bodyguards, polling, tattooing, social event planning, and investment management services.

McDaniel noted that the tax changes included a 3 cent per kilowatt hour fee added for charging electric cars.

HB 8 now goes back to the House for its consideration.

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One Comment

  1. Roger Auge says:

    I wish to apologize to Sen McDaniel. He is a good rep for N.Ky. He is different from most low life Republicans like you-know-who.

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