KY Policy Blog

How the Senate Budget Differs from the House

By Jason Bailey
March 25, 2014

The Senate budget puts less money into early childhood and education programs, capital projects and some health programs than the House budget and allocates more money to the state police, university operations and the rainy day fund. It brings in and spends less money overall than what the House had proposed, and obligates less dollars in future years. Here’s an overview of some of the major changes the Senate made from what the House proposed.

Less for early childhood and education

Some of the biggest cuts in the Senate budget relative to the House involve early childhood education and care. The Senate cuts $13.8 million each year from the proposed expansion of pre-school. It also cuts $14 million in 2015 from child care subsidies, thereby phasing in the restoration of funds following a cut last year rather than restoring the funds immediately. The Senate budget also cuts $3 million each year the House had proposed to increase child care provider reimbursements rates and $5 million annually the House had included to increase foster care reimbursement rates (in both cases, federal funds were also cut as a result).

The Senate budget reduces funding in 2015 for extended school services by $6.6 million and teacher professional development by $3.3 million. It spends the same on instructional resources (textbooks) as the House had proposed, although that is $5 million less than what the governor had suggested.

Less for certain health and safety programs

The Senate budget accepts the $2.5 billion in federal funds over the biennium for implementation of the Affordable Care Act, and claims the $166 million in General Fund savings that will result from having more people covered by Medicaid and through the exchange. However, it goes even further by cutting funding for indigent care at the University of Louisville hospital by $15 million over the biennium, funds that pay for the cost of care to the uninsured. This assumes much more rapid enrollment in Medicaid and the health exchange than is possible.

The Senate budget cuts funding for mine safety by $2.6 million a year (from coal severance monies) and reduces the number of required mine safety inspections at coal mines to two a year from the current six a year. The legislature had increased the number of required inspections from three to six in 2007 following the Darby mine disaster.

The Senate also cuts the Department of Public Health by $5.4 million over the biennium, including less money than the House had proposed for breast, cervical and colon cancer screening. The budget cuts $1 million each year from the Cabinet for Health and Family Services’ appropriation for Family Resource and Youth Service Centers and $3.1 million in 2015 from school safety. It also cuts $1.6 million over two years the House had proposed for enhanced 911 emergency services.

Less for capital projects

The Senate includes $533 million in bonds in its budget compared to $2 billion in the House budget. This would result in a debt ratio of 6.26 percent as opposed to 7.05 percent in the House budget, meaning a smaller share of future revenue would go to pay debt service costs. The Senate budget allows community colleges to raise fees on students to pay for construction projects, but only if 25 percent of the funds are raised from other sources.

The Senate budget deletes the over 400 earmarked projects included in the House budget for coal counties using coal severance tax monies.

More for university operations and police

The governor and House had proposed 2.5 percent cuts to the operating budgets of the state’s universities and community colleges. The Senate puts nearly $40 million into preventing a cut to the universities, although its budget continues to allow a 2.5 percent cut to the community college system.

The Senate proposes $3.5 million more over the biennium to the state police to hire 25 troopers, but cuts funding for county and commonwealth’s attorneys by $2.8 million compared to what the House had proposed.

Less revenue accessed and more left over

The Senate has less money to spend than the House had proposed. The Senate’s budget does not generate additional revenue from the tax on instant racing that the House had proposed, meaning $1.1 million less a year and the threat of additional lost dollars because the Senate revenue bill does not clarify its legality. The Senate also does not include the $3 million that the House had assumed would come from allowing the lottery to advertise that its proceeds go primarily to college scholarships. And it does not cap the film industry tax credit at $1 million a year, as the House had proposed, which could mean more lost revenue.

The Senate utilizes $281 million over two years in transfers of money from various pots in state government to the General Fund, which is $61 million less than what the House had proposed. The Senate transfers no money out of the professional licensing boards. It transfers $50 million less from the Petroleum Storage Tank Fund and $10 million less from the Kentucky Heritage Land Conservation Fund (though the House had proposed issuing bonds for those funds to offset the transfers, which the Senate does not include).The Senate budget also transfers $3 million less from a fund in the Tourism Cabinet that uses transient room tax revenues for marketing. The Senate, unlike the House, takes $11 million it says are held by the Kentucky Lottery Corporation as unrestricted reserves.

The Senate budget leaves more money unspent at the end of the biennium, and proposes depositing $26.9 million into the state’s rainy day fund. The House budget had proposed $1.5 million. The Senate budget would also leave money in the coal severance tax accounts that are accessible by coal counties, whereas the House had earmarked that money to the specific projects mentioned above.

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