State lawmakers return to Frankfort on Tuesday, January 7, with a two-year budget topping the agenda for the 60-day session.

Both the House and Senate have a Republican supermajority, and the relationship with Republican Gov. Matt Bevin was still contentious at times. With Democrat Andy Beshear now in the Governor’s office, will the current cordial relationship last?

Senate President Robert Stivers, R-Manchester, says they have had several conversations and meetings with Beshear, jointly and separately, and will keep the confidences of those discussions between them.
House Speaker David Osborne, R-Prospect, recently said, “I think that you will find a group of legislators that are ready, willing and excited about going to work with anybody that is ready to move the Commonwealth forward.”

The Consensus Forecasting Group in December predicted only small growth in state revenue for the upcoming biennium, $146 million and $201 million, and warned of a recession the following year, meaning there is not a lot of money to go around.
In addition, Bevin’s budget director John Chilton sent a letter to lawmakers and Beshear in early December, warning of a potential $1.1 billion shortfall over the next two years, due to increased costs in public pensions, Medicaid and the Corrections Department.

However, Beshear told Kentucky Today shortly before taking office that he wasn’t alarmed, and it will come down to priorities. “There is never going to be enough money for everything we want to do, so the question is, what is most important to us?”

On Friday, Beshear told reporters his top priority can be summed in the acronym “WHERE. “The ‘W’ standing for wages, the ‘H’ standing for health care, the first ‘E’ is education, ‘R’ is for retirement and the last ‘E’ is for example.”

He continued, “It’s about ensuring that we provide good quality health care for all Kentuckians; that’s critical for our workforce and it’s also the moral and the right thing to do. It’s about working to lift up our education system and attempting to end some devastating cuts that we’ve seen in areas ranging from higher education to others.

“To make sure we continue our commitment to the pension system and that we do all of this in a way where we are leading by example, showing this country we can come together and move forward where there’s common ground, and where there is not, that we can disagree civilly.”

Beshear admitted a lot of his time since taking office December 10 has been taken up by the budget.

“It is a challenge, but it’s the type of challenge that I ran to address. And, in times of scarcity, when there isn’t enough money for everything we’d like government to do, that’s when our values become even more important. You will see that we will have a budget that starts with education and makes significant investment in it. You will see that we are going to fully fund expanded Medicaid.”

Another topic he says will have to be addressed are the spiraling costs of Corrections, “We’re going to have to have some very serious conversations that don’t just come from the moral side of criminal justice reform, which I believe in, but also the economic side, in a world of finite resources.”

One thing Osborne says lawmakers will address is fully funding the school safety legislation they passed during the 2019 legislative session, which has seen estimates of $121 million. “I’ve seen multiple figures on what that amounts to, but I will tell you that we are committed in the House to funding the implementation of the school safety bill.”

All this means the state is going to have to come up with new revenue sources. Beshear stated, “I believe the area that appears to have to the most impetus behind it is the sports betting bill. I’d like to see that happen.”

He also supports legalization of casinos.

Senate President Robert Stivers, R- Manchester, has also indicated it has a better chance than full-blown casino legalization. “I think casino gaming is fast, it’s got all the bells and whistles, I think it has the potential of being very addictive. I don’t think sports wagering does. I don’t think it also generates the money that is going to be predicted, so I’m really ambivalent; not really supportive not in opposition to it.”

A potential one-time source of revenue comes from Stivers, who has said he plans to introduce a resolution the first day of the 2020 session, to move an investigation forward into the Purdue Pharma settlement, entered into by former Attorney General Jack Conway, a Democrat, who Republicans have said got the state much less money than it should have.

Kentucky received $24 million in 2015, while Oklahoma netted $270 million in March 2019.

Stivers, who is an attorney, said the bankruptcy of Purdue Pharma causes an additional question for Kentucky.

“We’re not going to get part of our money. Does that give us the opportunity to vacate the judgment and agreement, to go possibly into the master settlement where there may be more?”

He would not say who would lead the investigation.

“We still have some thoughts and theories about whether it should be outside the political realm, in the sense of the Attorney General’s office, the Auditor, the Treasurer or an outside counsel, and who has the capacity. For us, the separation of powers issue and what our capacity would be, except to create it.”

In the way of taxes, there seems to be growing support for raising the fuel tax by ten cents per gallon, to help pay for needed road and bridge repairs and construction, especially since it’s strongly supported by the Kentucky Chamber of Commerce.

Beshear says he expects talks on various tax measures. “This large-scale thing called tax reform can mean a hundred different thigs to a hundred different people, and that’s the challenge.”

It remains to be seen how a new leader for the minority House Democrats will affect operations. Rocky Adkins of Sandy Hook was the floor leader when Democrats were in the majority, as well as the minority when the chamber flipped in the 2016 election but resigned last month to become Senior Advisor to Gov. Beshear. Rep. Joni Jenkins, D-Shively. Was elected by House Democrats to replace Adkins.

Another big unknown at this time, is when House Majority Leader John “Bam” Carney will be able to return to his duties. He has been hospitalized since shortly before Christmas with a severe case of pancreatitis but was last reported to be improving.

Lawmakers convene at Noon on January 7, with the last day April 15.