Senate pushes spending plan calling for state worker raises

FRANKFORT, Ky. (AP) — Senate Republicans pushed forward their version of Kentucky’s next two-year spending plan Wednesday, endorsing pay raises for state employees and directing money for improvements at state parks and the state fairgrounds.

The proposal emerged after weeks of behind-the-scenes work as the GOP-led legislature moves into the crucial final weeks of this year’s session. The Senate passed its version 30-6, hours after the measure cleared a committee. The focus will now shift to a House-Senate conference committee hashing out a final spending plan.

Boosting state workers’ pay ranked as the top priority in the Senate budget, said Senate Appropriations and Revenue Committee Chairman Chris McDaniel.

“We have lost and continue to lose some of the best and brightest talent in the commonwealth,” he said in presenting the spending plan.

The Senate proposal includes a $4,500 pay raise for state employees in the first year of the next two-year budget cycle, McDaniel said. It features a second-year raise that would be allocated after a Personnel Cabinet study of employees’ positions and cost-of-living by region.

Kentucky State Police troopers and social workers would receive larger pay raises.

It reflects widespread agreement by both chambers and Democratic Gov. Andy Beshear that the state workforce is due a raise. The House included a pay raise in the budget it passed in January, as did Beshear in the spending blueprint he submitted to lawmakers at the start of the session.

The Senate plan also calls for reviews of the state fairgrounds and state parks system. In the second year, the spending proposal would authorize $250 million to overhaul the parks system and $200 million to renovate the fairgrounds, McDaniel said. In advocating the improvements to state parks, he said: “At one point they were a gem. But that gem has become very rough.”

The House version also includes money for renovation projects at state parks.

Critics of the Senate version said it missed opportunities to ramp up the state’s investments in early childhood education during a time of massive budget surpluses. State revenues have surged amid a growing state economy and the influx of federal pandemic aid.

“There’s just so much more we could have done,” Democratic Sen. Reginald Thomas said Wednesday in assessing the Senate’s version.

The Senate proposal mirrors the House-passed version on a key element of education funding. Both plans call for the same increases in per-pupil funding under SEEK — the state’s main funding formula for K-12 schools. The amount would go to $4,100 in the first fiscal year and $4,200 in the second year. Beshear proposed higher amounts. The current amount is $4,000.

The House and Senate plans parted ways on another education issue. The House plan calls for the state to cover the entire cost of full-day kindergarten. The Senate version left that out.

Beshear’s call for state-funded preschool for 4-year-olds was left out of each chamber’s version. So was the governor’s proposal for pay raises for teachers. McDaniel said with additional funding flowing to school districts, there’s “plenty of money” for school boards to boost teachers’ pay.

“If they want to do raises, absolutely they can,” McDaniel said.

Meanwhile, the Senate’s spending plan includes more than $1 billion in unspent funds — giving lawmakers room to consider changes to the state’s tax system.

McDaniel told reporters Wednesday there’s “ongoing interest” in tax legislation, adding: “We have left some space for that conversation” — a reference to the pool of unallocated money.

The House voted recently to revamp Kentucky’s tax code, passing legislation aimed at phasing out individual income taxes and extending the state sales tax to more services.

In a separate move, the Senate recently passed a bill to deliver more than $1 billion in income tax rebates to taxpayers. The measure would grant state personal income tax rebates of up to $500 per individual and up to $1,000 per household. McDaniel said the measure would offer some relief for inflation-weary Kentuckians struggling with rising prices.

Beshear has endorsed a temporary cut in the state sales tax rate as a way to provide widespread relief from rising consumer prices.