A short, 30-day legislative session gives lawmakers little time to pass pension reform, tax code fixes, a school safety bill, and other priority items on their agendas.
A short session also leaves special interest groups less time to make their cases for legislation that is important to their constituents.
KET’s Kentucky Tonight explored the priority bills of four such groups working in the commonwealth. The guests were Jason Bailey, executive director of the Kentucky Center for Economic Policy; Terry Brooks, executive director of the Kentucky Youth Advocates; Anne-Tyler Morgan, member of the McBrayer law firm and senior fellow with Pegasus Institute; and Ashli Watts, senior vice president of public affairs for the Kentucky Chamber of Commerce.
Top Priorities for These Groups
After last month’s failed special legislative session on pension reform, Ashli Watts says a resolution to the pension crisis remains a top priority for the Kentucky Chamber. She applauds the formation of a new, bipartisan working group to explore the issue and propose reform legislation that can garner support among Republicans and Democrats.
Watts says the Chamber is also eager to see several corrections to last year’s tax overhaul, and she says it’s also time for the state to fund critical infrastructure projects.
“We know that states that are booming have done so, such as Tennessee [and] Indiana,” Watts says. “So it’s time for Kentucky to really look at our infrastructure and our Road Fund [and] modernize the Road Fund.”
The 2018 legislative session also produced a major overhaul to the state’s foster care and adoption system that was hailed on both sides of the aisle. Terry Brooks of Kentucky Youth Advocates hopes to build on that success this year.
“The work around child welfare has truly been bipartisan,” Brooks says, “and we want to make sure that that accelerates and begins to reach the potential it holds.”
Brooks says he’s also focused on school safety legislation and criminal justice measures such as bail reform, which he says impacts parents, and so-called status offenses that affect minors.
The Pegasus Institute think tank has set its sights on bail reform as well. Anne-Tyler Morgan says Kentuckians shouldn’t be kept from their families and their jobs simply because they can’t afford to pay bail. She says the institute also advocates for welfare reform to ensure that the state is administering those funds as efficiently and effectively as possible. She says wise use of taxpayer dollars is also important for the public education system.
“We’re interested in ensuring that school leaders and school district leaders have the tools that they need to empower their students,” Morgan says, “but also the flexibility that they need to really target services in education to the population that they serve.”
Welfare reform and criminal justice reform are also top priorities for the Kentucky Center for Economic Policy. With jail overcrowding reaching crisis levels, Jason Bailey says it’s time to address how the money bail system works in Kentucky, and to fix racial disparities that exist in the juvenile justice system.
On welfare reform, Bailey says he opposes changes that will make it harder for Kentuckians to access important safety-net programs like Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). Bailey also urges caution when lawmakers move to update the state tax codes.
“Anytime we throw it open, there are lobbyists who swarm,” says Bailey. “There are many sessions when we see tax breaks passed on the very last day, and so be very wary and vigilant when people say they want to clean up the tax code.”
In the wake of a school shooting last year in Marshall County that left two people dead and 14 injured, lawmakers in both chambers and parties have made school safety legislation a top priority. Senate Bill 1 and House Bill 1 both include provisions for campus and building security, more school resource officers, and mental and behavioral health assistance for students. The bills do not allow for arming teachers, nor do they call for gun-control measures.
“You really can’t do this unless you include common-sense gun legislation,” says Bailey. “That difficult conversation that we have to have is not part of this legislation, and that’s unfortunate.”
Bailey is also concerned about how the safety measures will be funded, given the already tight state budget for public education. Brooks says the state can capture some federal Medicaid matching dollars to help with mental and behavioral health activities.
Overall, Brooks praises the bill but he is concerned about the number of law enforcement personnel that might be placed in Kentucky schools. He says he had mixed experiences with resource officers during his tenure as a school administrator.
“There are going to be more law enforcement personnel in schools,” says Brooks. “So the question is, how do we ensure that that presence is developmentally appropriate for kids, they’re effective… [and] that they’re not disciplinarians.”
Morgan says community partners need to be a bigger part of the school safety conversation. She says local law enforcement as well as federally qualified health centers, substance abuse programs, and other entities could be tapped to so that school districts don’t have to hire as many additional employees.
Even if nothing else in the 2019 session gets passed, Watts says lawmakers will approve a school safety measure of some kind.
Taxes and Revenues
Watts says the Kentucky Chamber is pushing two updates to last year’s tax package. One would relieve 501(c)(3)-designated nonprofit organizations from having to collect sales tax on tickets sold to educational events. The other is a repeal of the combined reporting provision that requires corporations to report income as one unit, rather than being able to shift moneys to subsidiaries in other states that may have lower or no tax burdens. Watts says the requirement is costing Kentucky businesses millions of dollars a year.
Bailey says the 2018 tax bill gave corporations about $70 million in tax cuts. He contends eliminating combined reporting would give those businesses an even greater tax advantage at the expense of everyday Kentuckians. He says 26 other states have the combined reporting requirement.
Last year’s tax package also increased the cigarette tax by 50 cents. Brooks and Watts say lawmakers should consider adding another 50 cents to that tax and applying the levy to electronic cigarettes as well. But Watts says she doubts legislators have the will to enact a $1 per pack tax on cigarettes.
“We’d absolutely support it – not for the revenue, but for the health impact,” says Watts. “We have the unhealthiest workforce in the nation and this is a really great step to try to help curb the cancer epidemic that we have in Kentucky.”
Lawmakers are considering other potential sources of new revenue, including expanded gambling, sports wagering, and legalizing medical marijuana. While each of those options may have their own merits, Bailey says none of them will generate enough revenue to substantively impact the state’s $11 billion annual budget.
While no bigger changes are planned for the tax codes this year, Watts says she hopes lawmakers will continue to move the state away from personal and corporate income taxes to a more consumption-based system focused on sales taxes. She says that would make Kentucky more competitive with neighboring states.
Brooks says lawmakers need to find an issue like child welfare or support for families that can galvanize public support for tax changes that generate more revenue. He joins with Morgan in advocating for a bipartisan working group to study comprehensive tax reform and propose changes that could be put into one omnibus bill.
“The only way to really fix the issues that we’re all discussing and I think we can all agree need to be fully funded through our revenue system is to ensure that we’re uncovering all of the potential sources of revenue at one time, rather than continuing to stack laws on top of one other,” Morgan says.
Bailey says such a task force was formed in 2018, and it provided some excellent recommendations for dramatically reducing the number of tax breaks and expenditures currently on the books. But Morgan says there’s not been enough support to turn those proposals into a bill.
Criminal Justice Issues
Each of the four organizations advocates for reforms to the state’s money bail system. Watts says in 2016, more than 64,000 Kentuckians charged with non-violent, non-sexual offenses sat in jail for an average of 109 days because they couldn’t afford to pay their bail. That’s led to significant overcrowding in local jails, and higher incarceration expenses for county governments and the state.
Plus the current system hurts families, according to Brooks. When offenders are held for long periods of time, they are at risk of losing their jobs and their homes, and their children may have to be placed in state care. Brooks says a new bail system can be implemented that doesn’t disproportionately impact low-income individuals and families while also keeping dangerous criminals behind bars.
“It’s one of those win, win, wins,” says Brooks. “The budget wins, community safety wins, and families win.”
Critics of bail reform argue that it is soft on crime and can hinder a judge in setting bail for certain offenders. While judicial discretion is important, Bailey says he hopes any bail legislation doesn’t include so much leeway for judges that they can undermine the goals of bail reform.
“Seventy-three percent of Kentucky jails at the local level are at or over capacity at this point. We have to take action,” says Bailey. But he adds that “bail reform is not criminal justice reform… It will reduce the number of people who are in jail at any one time, but it won’t keep people from being incarcerated, and so we still have much to do there.”
Bailey and Watts say the filing fee for those applying for felony expungement should be lowered from the current $500. Watts says that becomes another barrier to former inmates getting their lives back on track. Morgan says the list of felony offenses that could be expunged should also be expanded. Now only certain low-level, Class D felonies are eligible for expungement. She says the criminal justice system should be about offender rehabilitation not just punishment.
Other Legal Matters
Republican lawmakers have introduced several bills that would limit the availability of abortions in the commonwealth. Bailey says any of those measures that pass will end up costing the state money to fight the legal challenges they will likely face.
GOP leaders are also considering next steps on tort reform. The 2017 General Assembly approved legislation to create medical review panels to try to cut down on the number of liability lawsuits in the state. But the Kentucky Supreme Court declared the law unconstitutional, saying it limited a plaintiff’s access to the courts.
Morgan says an alternative to medical review panels is to require an affidavit of merit (sometimes called a certificate of merit) in medical malpractice lawsuits.
“All that means is that you seek a physician or provider in a similar specialty to be able to render a quick summary opinion on whether there’s a case,” Morgan says. “Certificates and affidavits of merit are a great way to actually weed out bad actors in the trial litigation system without impacting negatively those practitioners who are representing clients with very valid claims.”
More than 25 states already require such affidavits, including Tennessee. Watts says insurance rates there have dropped 30 percent as a result of the affidavits. She says the business community and health providers have long sought caps on damages in liability cases. But she says there’s not the political will to enforce that through an amendment to the state constitution. She says requiring an affidavit of merit might address the concerns of business interests and trial attorneys.
“Realistically in a 30-day session, what can we do to help improve the legal liability climate of Kentucky?” say Watts. “We think maybe certificate of merit is good step in the right direction.”