Local Option Sales Tax:
HB 2, the local option sales tax constitutional bill, was also introduced. The proposal would allow local governments to enact up to an additional 1% sales tax for specific, voter-approved capital projects. When the projects are finished, the tax would sunset. Local option sales tax legislation, also known as LIFT, is supported by Commerce Lexington. The chamber has visited several cities, including Oklahoma City, on the annual Leadership Visit, and our leaders have seen firsthand the positive impact of transformative community projects from local option sales tax.
In December 2015, Commerce Lexington assembled a group of diverse business and community leaders for an envisioning process to generate potential project ideas - if the Urban County Council, with local voter approval, had the ability to utilize this investment tool. Some of the top ideas included: education and workforce training center, sportsplex facility; and enhanced green spaces, parks and trail systems.
Commerce Lexington Inc.-supported legislation (HB 309) dealing with public-private partnerships (P3's) passed out of the House this week. It now heads to the Senate for consideration. This legislation creates a transparent and explicit framework under Kentucky's procurement code through which the state and local governments may use a public-private partnership to provide services, facilities and transportation infrastructure to the public. The bill provides an alternative method for project financing to help local governments operating on limited budgets provide more efficient and effective services. The bill eliminates tolling as an option for the Brent Spence Bridge project in Northern Kentucky -- a point of contention among officials last session.
This past week, University of Kentucky President Eli Capilouto testified before the House Budget Review Subcommittee on Higher Education regarding the impact of the Governor Bevin's proposed budget cuts to the university. Dr. Capilouto stressed three key message points to legislators:
- The University of Kentucky is an economic engine deserving more investment, not less. Kentucky's $280 million investment yields a 12-fold return from its $3.4 billion flagship university.
- The cuts, as proposed, would have a chilling effect on UK's ability to prepare students for the workforce, continue innovative research and meet the health care needs of Kentuckians.
- Performance-based funding can be an important tool, but it needs to be done transparently, carefully, and in partnership with Kentucky's public colleges and universities.
View the UK story here
The Governor proposed 4.5 % cuts for the current fiscal year and 9% reduction to baseline spending over the next two years. For UK, this means a significant cut its general fund appropriation which is used primarily for operational costs. Between now and June 30 of this year, UK's current state appropriation will be reduced by $12.6 million (4.5%). In the first year of the new two-year budget cycle starting July 1, UK would face an additional $25.2 million cut to its state appropriation. In FY 18, the Governor also called for nearly a one-third of general fund appropriations for public universities to be allocated based on a performance based criteria. The details of the criteria are to be determined.
SB 1, a sweeping bill that could change many aspects of Kentucky's education system, passed the Senate Education Committee. Supporters are calling it "Phase II" of the 2009 legislation that instituted education reforms. Among its many provisions, the legislation proposes a review process for local and state academic standards.
HCR 97, which calls for a study of Kentucky's workforce development system, passed out of the House. A similar proposal (SCR 75) has been filed in the Senate. Both set-up a Task Force to include legislators and other industry experts to study and develop recommendations concerning programs and funding investments by Dec. 1, 2016.
Workers' Compensation Fix:
SB 151 seeks to offset temporary total disability benefits for light duty work and encourage employees to return to work after an injury. This bill would allow payments of workers' compensation benefits to be offset by wages to an employee by an employer for light duty work performed during a period of temporary total disability. The bill passed a Senate Committee and awaits consideration by the full Senate.
Click to view a full listing of the legislation Commerce Lexington is tracking this session.
If you have questions about a specific bill or issue, contact Andi Johnson, Commerce Lexington's vice president of public policy at (859) 226-1614.