House and Senate undo vetoes

The Kentucky House and Senate overrode Friday the governor’s vetoes of the state’s two-year, $22 billion budget and accompanying revenue measure.

The veto of the budget bill, known as House Bill 200, was overridden in the Senate 25-12 and in the House 66-28. The budget includes 6.25 percent baseline cuts for most state agencies, although some agencies are spared.

“House Bill 200 ensures we fully fund the Department of Veterans’ Affairs, that we fully fund the Kentucky State Police, that we ensure the request for new cruisers and rifles for the Kentucky State Police is fully funded,” said Senate Appropriations and Revenue Committee Chairman Christian McDaniel, R-Taylor Mill. “House Bill 200 makes sure the Commonwealth will not open and does not allocate money for private prisons.”

McDaniel said HB 200 would boost base per-pupil funding for K-12 education to a record level of $4,000 per student in each fiscal year while providing money for school buses. HB 200 also includes more than $60 million in new revenue to help implement proposed adoption and foster care reforms, he said, adding additional money for social workers and prosecutors is also included.

“It makes sure we fully fund the request of the Kentucky Teachers’ Retirement System for a full pension contribution,” McDaniel said. “I could go on and on, but we’ve all had nearly two weeks to go through House Bill 200 to know what it is about.”

A senator who didn’t vote to override the veto of HB 200 was Morgan McGarvey, D-Louisville.

“This budget does do some good things,” he said. “We have to admit that. That is what makes this at times a tough vote, but there is nothing in this budget that is a gift. It still plays a magic act where we ask you to look over here at the good things and not address the fact that we are very much still picking winners and losers.”

During the House debate on HB 200, State Government Chair Jerry Miller, R-Louisville, said he supported the override because the budget finally addressed the underfunded pensions. He said prior budgets contained money for local projects without properly funding the initiatives.

“Unfortunately we have at least $43 billion underfunded (our pension systems),” said Miller. “We had to take action because since 1943, candy has been given without being fully paid for. And that’s why I’m going to vote to override the veto.”

One of the representatives who voted to uphold the governor’s veto was Jim Wayne, D-Louisville, who said the General Assembly had a chance to do better.

“We need to take this budget, and defeat it -support the veto-and then together … work on a common vision, shared high values, reaching out for the very best of who we are and what our people are,” he said.

The veto of the accompanying revenue measure, known as House Bill 366, was overridden in the Senate 20-18 and in the House 57-40.

HB 366 creates a flat 5 percent rate for personal and corporate income taxes, expands the sales tax to some services such as car repairs and raises the cigarette tax 50 cents to $1.10 per pack. The only itemized deductions allowed under HB 366 will be for Social Security income, mortgage income and charitable giving. And the inventory tax will also be phased out over a four-year period.

In the Senate, Majority Floor Leader Damon Thayer, R-Georgetown, said HB 366 will generate nearly a half of billion dollars in additional money for the state over the next two fiscal years.

“What this bill does is what Republicans have talked about for many years on tax reform,” he said. “It lowers the rates and increases the base – moving away from taxes on production and moving to taxes on consumption.”

Thayer said that has been part of a winning formula for Florida, Texas, Indiana and Tennessee. He said HB 366 would move Kentucky from 33rd in business competitiveness to 18th.

“When we become more competitive, we create more jobs,” Thayer said. “We then create more taxpayers with more money going into the coffers to pay for things like education.”

Senate Minority Floor Leader Ray S. Jones II, D-Pikeville, spoke against the veto override.

“What this tax bill really does is raise $436 million in taxes from the people who can least afford to pay more,” he said.

During House debate of HB 366, Minority Leader Rocky Adkins, D-Sandy Hook, also spoke against the veto override.

“This bill is not tax reform. This bill is a tax shift. And it’s a tax shift from the wealthy and the corporations to those least able to pay,” he said.

Among the Representatives who voted to override the veto of HB 366 was Jason Nemes, R-Louisville.

“This is an education bill. That’s why our teachers demand an override. That’s why our public employees demand an override,” he said.

Later in his speech, he said, “Are you with public educators or are you not?”

The General Assembly also overrode a veto of House Bill 362, a measure designed to give some county governments, municipalities and school districts relief from soaring pension costs this year. The House voted 94-2 to override while the Senate voted 34-4.

The measure, sometimes referred to as a “rate-collar,” will provide the pension relief government entities desperately needed in order to phase in, over a maximum of 10 years, the full increase in rates passed by the Kentucky Retirement System board last December.