Beshear's proposed budget provides money for many, including health departments and their pensions, pay raises and broadband

Gov. Andy Beshear gave his budget speech via video. (Image screenshot from KET)

By Melissa Patrick
Kentucky Health News

The state budget Gov. Andy Beshear's proposed Thursday would provide additional money to support the work of health departments, and much-needed pension relief for the departments and community mental-health centers. 

Beshear outlined the proposal in a speech presented via video during a joint session of the House and Senate, rather than in person, "to set an example of how we fight the Covid-19 pandemic," he said. It was televised on Kentucky Educational Television, which elicited reactions from legislators.

The budget would also provide funding for 76 more social workers and full-time mental-health staff based at schools, and increase slots for helping people with intellectual or developmental disabilities. 

It is uncertain what portions of the Democratic governor's state budget will pass, since he faces Republican 3-to-1 super-majorities in each chamber of the General Assembly, but "It's going to be hard for the majority to say no to a lot of those things," House Democratic Leader Joni Jenkins said.

The budget is more generous than most close observers expected at first, and Senate President Robert Stivers attributed that to an economy and state coffers fueled by pandemic relief funds from Congress.

Stivers said that means revenue sources will have to be examined. He and House Speaker David Osborne cautioned that Kentuckians should expect a more conservative approach in the final budget. 

"I think that you will tend to see us take a very, very conservative approach," Osborne said. "And we'll still have a very lean budget going forward." 

Broadband: The proposal also includes $50 million to fund "last mile" broadband coverage, which has become even more important during the pandemic as many Kentuckians have sought health care via telehealth.

"We used to think of broadband in terms of just business," Beshear said. "But now we know it touches every part of our lives: the education of our kids, how we receive health care. This is the most important infrastructure of the future."

Beshear said it would be "the first time state dollars have been used to invest in expanding broadband," which probably raised eyebrows among legislators, who have wrestled for years with the Kentucky Wired project started by the governor's father, Steve Beshear, and U.S. Rep. Hal Rogers, R-Somerset.

The state has had to put millions of extra dollars into the project, but not for the "last mile," the extension of fiber-optic cables to homes and businesses. Kentucky Wired is a high-speed network into which any internet service provider, including local governments and businesses, can tap into.

Big picture: Beshear called the budget "fiscally responsible" and stressed that it does not rely on new taxes, the passage of new revenue measures or spending cuts. The Lexington Herald-Leader reports that Kentucky has cut more than $2.3 billion in state spending since the Great Recession in 2008-09.

Among the broad major proposals in the budget were a 1 percent pay raise for state employees and a $1,000 pay hike for every school employee. Osborne and Stivers sounded skeptical of giving raises to state and school workers when many in Kentucky are unemployed and still waiting for benefits.

The governor urged lawmakers to work together in support of all Kentucky families, to take the coronavirus seriously and to set politics aside. He did not refer to bills moving quickly through the legislature that will reduce his powers, but to conflicts in general.

“Let me be clear: Every moment in this short session we spend fighting is a loss for our Kentucky families," he said. "Such fighting will leave us empty-handed and further behind those states that recognize this moment and this opportunity. Our goal should be to act swiftly and with wisdom on behalf of the people of the commonwealth."

Action on the budget will be swifter than usual, because Beshear presented it early and legislative leaders plan to start picking it apart and negotiating changes during the recess that will run through Feb. 1. The leaders decided Thursday to delay the start of the recess from Saturday to next Thursday, apparently to complete work on bills now moving. 

The budget is for the fiscal year that begins July 1. The state usually has a two-year budget, but because of the uncertainty of pandemic expenses it opted for one-year budget in the last legislative session.

What's in it for health? 

Medicaid: Beshear's proposal would fully fund the program that provides health care for a third of Kentuckians. The budget summary notes a rise in enrollment during the pandemic, and anticipates a 14% enrollment increase in the current fiscal year and a decline in the new fiscal year. The summary notes that due to the pandemic, Congress has boosted states' Medicaid funding 6.2% through June 30. The federal government normally pays about three-fourths of Medicaid costs.

Medicaid waivers: The proposal would provides $3.5 million for 250 more slots in the "Michelle P." waiver program and 50 slots in the Supports for Community Living waiver program, both of which help people with intellectual or developmental disabilities. Thousands of Kentuckians are on waiting lists.

Social workers: Beshear's plan would provide $7 million to add 76 social workers for children's protective services, for a new total of 1,401, and $1 million to discourage them from leaving their jobs.

Health departments: The plan would double the state's financial support to local health departments, to $24 million, to improve their capacity for epidemiology and clinical care. 

The proposal also provides pension relief to the state's quasi-governmental agencies, which includes all health departments except the one in Jefferson County and 13 community mental-health centers. 

The groups are facing increased expense of about $60 million to meet their a new pension-financing rate, 85% of payroll costs. The budget's summary says it would support their transition from the Kentucky Employment Retirement System non-hazardous plan to a fixed allocation, or prorated amount of the actuarially accrued liability for each employer, as proposed in House Bill 8, co-sponsored by Rep. Jim DuPlessis, R-Elizabethtown, and Rep. Steve Sheldon, R-Bowling Green. A similar bill passed out of the House last year, but was not heard in the Senate.

"The governor’s budget adds $33.5 million each year for the health departments and $18.8 million each year for the Community Mental Health Centers from the General Fund to fund 100% of the additional cost of employer contributions for these critical health providers," the budget summary says. 

In prepared statements, Sara Jo Best, health director of Lincoln Trail District Health Department and president of the state health-department association, called the pension funding "crucial." Steve Shannon, executive director of  the Kentucky Association of Regional Programs, applauded the financial support in the proposed budget for community mental health centers.

"The additional funding assistance for the escalating public pension costs permits the CMHCs to continue operating as the behavioral health public safety net for all Kentuckians," he said. "Thank you, Gov. Beshear!”