Greetings and best wishes for a new year. A new year also marks a new season in your state capital. On Tuesday, the Senate convened for the 2013 30-day General Assembly session. The first week is traditionally an “organizational” week in which the respective caucuses choose their leaders and committee assignments are disbursed to the members.
I was pleased to continue serving as the chairman of the banking and insurance committee. I will also be serving on appropriations and revenue committee; the health and welfare committee; licensing, occupations, and administrative regulations committee; the Medicaid oversight and advisory committee; and the program review and investigations committee. I am excited to contribute my efforts to each one of these.
While the 2013 session is technically a “short” one, it surely is not one that will be short on issues. While odd-year sessions are not typically budget years, there are several issues that could affect budget planning.
First and foremost is the issue of public employee pension reform. Many of you are aware that the public employee pension system is only about 26-percent funded, which represents a $33 billion unfunded liability. (Please note that teachers’ retirement is entirely different and these discussions do not apply to it.)
Over the summer, a task force formed to offer recommendations heard from a diverse group of advocates and experts such as state employees, business groups, and the Pew Center. One of the principle recommendations is to fully fund the actuarial recommended contribution. Indubitably, tough decisions are ahead. What is clear, though, is that the system is in dire need of reform because the retirement system will end up consuming more and more tax dollars, straining the budgets of other taxpayer needs such as education and human services.
Gov. Beshear has tried to link pension reform with his task force on tax reform. Recently, this group recommended raising both household and business utility rates, raising the cigarette tax, taxing retiree pensions, and eliminating certain deductions among other suggestions. First of all, let me be clear, I just don’t see much sentiment in the Senate for raising taxes. No one has made the case to me that raising taxes will spur the economy, and surely we would want a tax policy that grows jobs and expands the economy. More people employed and paying taxes is certainly better than less. As a revenue measure, these types of bills must start in the House of Representatives. As your senator, however, I intend to be very vocal about protecting your hard-earned income.
Another challenge facing the Commonwealth is the governor’s implementation of Medicaid managed care, which, unfortunately, has been less than ideal from the start. Over the summer and fall, both in committee meetings and in informal talks with people from the district, I have heard many complaints about denial of care to patients and delayed payments to doctors and hospitals. Medicaid provides a valuable service to more than 800,000 Kentuckians, and it is a huge cost driver to the state budget. My goal is to make sure every tax dollar used to fund Medicaid is used effectively.
Education and ensuring our children are work- and career-ready remains a priority for me. Rewarding students who push themselves to take advanced-placement classes and the teachers who teach them has been on the Senate agenda. It is likely that you will see another push in this area as well as a bill making it easier for students to graduate high school early too. We will also continue to monitor the implementation of a Senate proposal (SB 1 in 2009) that makes Kentucky a national leader using common-core standards and fair teacher evaluations. I will also carefully evaluate any school safety proposals considered during the next session.
There will be plenty of other topics, of course. Financial transparency of special taxing districts and the impact of Obamacare on Kentucky — since the governor has already authorized a state health-care exchange — will all be addressed in some form. The overregulations on physicians and patients concerning pain medication must also be resolved in this session.
I hope this provides you with a sense of the upcoming session. I am sure other bills will pop up that I have not mentioned, and I will do my best to keep you informed. In the meantime, if I can be of any assistance or you have any questions, concerns, or comments, please call me toll-free at 1-800-372-7181 or visit us at www.lrc.ky.gov to learn more about our work.