State Rep. John Sims and State Sen. Steve West were in Maysville Thursday to give an update on the recent legislative session in Frankfort.
The event was sponsored by the Maysville-Mason County Area Chamber of Commerce.
West spoke on the three major pieces of legislation passed during the session, including House Bill 200, which was the budget bill; Senate Bill 151, which was the pension reform bill; and the tax reform bill.
“This session could be summed up in a few adjectives — it was difficult, painful, historic, productive,” West said. “This is my fourth session. Some of the old timers there said this was the craziest, most pressure packed session they’ve seen. There were protests and a lot of speech from both parties. We eventually overrode vetoes from our governor in our own party.”
Of the budget bill, West said. “I felt we did a really good job keeping everything whole,” he said. “The main things we wanted to do was protect public protection, infrastructure and education.”
West said in regards to K-12 public education, legislators were able to pass a budget that put more money into the Support Excellence in Education in Kentucky fund, return funding for Family Resource and Youth Service Center programs and restored funding for school transportation.”
“We did a really good job protecting education,” he said. “You might see something on social media about how 6.25 percent was cut from education, but that’s not entirely true. We did cut from 6.25 percent but it was from the Frankfort component. You have several components. One of those is the Kentucky Department of Education component and the daily operations of that. That’s what we mean when we say we cut the Frankfort component.”
West also explained why the final pension reform bill was pushed through as Senate Bill 151, which was originally a waste water bill.
“After so far into the session, new bills can no longer be filed,” he said. “However, bills can be sent through as attachments, which is what happened in this situation. The only bill that was available was SB 151, so it was used a vehicle for the pension reform bill.”
He walked through the evolution and passage of the bill which began with Gov. Matt Bevin submitting his proposal late last year. The bill then went through changes in the House and Senate and both sides made compromises.
“It’s safe to say that the governor’s proposal drew a lot of attention,” West said. “It was dead on arrival at the House. Groups brought in shared responsibility plans and I’ve probably met with 35 groups of teachers from my area. We listened and we came up with a bill.”
In the bill recently passed, current retirees benefits remain the same; for current teachers, the only change will be that they can not accumulate sick days to be used on their retirement benefits. However, they can received payouts for the accumulated sick days. New teachers will be moved to a cash-hybrid plan.
“We knew if anything would pass, it would have to be from the House,” he said.
West also talked about the tax reform bill.
“It’s a tax increase,” he said. “It will raise an extra $400 million in revenue, which will be used for the pension system. It’s a good first step.”
The bill will add a 6 percent sales tax on services not previously tax, which includes small animal veterinarian services, landscaping, salons, maintenance work, car repair, extended warranties and several other services.
West said the tax reform bill also changes the individual income tax to a flat 5 percent.
“If you make over so much, that brings your income tax down to 5 percent,” he said. “I’ve heard people say, ‘yes, but you’re not giving a tax break to the poor’ and that’s true, but there is a reason behind that. If you make less than $18,000 a year, you pay no income tax.”
According to West, the corporate tax was also lowered.
“This bill will make us more competitive on an individual income tax and for businesses,” he said. “It will phase out the inventory tax over four years, which will also help bring in more businesses. If a place like Amazon is looking for a state to bring in new business, they’re going to look at the state with the tax and the one without and they’re going to go to the state without the inventory tax.”
Sims spoke briefly on a few bills that had passed during the session, which included SB 5 which would help smaller, locally owned pharmacies.
“This bill will level the playing field for small pharmacies to compete against the larger pharmacies,” Sims said.
Sims also talked about how he believed the tax bill that was passed did not do what was needed to bring in more revenue.
“It put a bandage on a cut instead of stitching it,” he said. “I don’t think it did everything that it needed to do.”
Other bills passed, according to Sims, included HB 132, which would require a financial literacy course in order to teach students how to be financially responsible and HB 400, which would allow the sale of Bourbon through mail order.
House Bill 1 was also briefly discussed by West and Sims.
“This bill makes several reforms to the adoption and foster care system in Kentucky,” West said.
West and Sims said infrastructure will most likely be one of the hot topics during the next legislative session.
One person in the room asked about the medical marijuana bill and why it did not go to a vote during session.
West said failed for two reasons — federal law that still makes possession of medical marijuana illegal and the lack of select studies on the effectiveness of the medical marijuana.
“It’s still illegal at the federal level,” he said. “Some states, like Colorado, have a letter from the Department of Justice that says they will not enforce the law. However, if a new DOJ head comes in, he could overturn that letter and start arresting people. A lot of states don’t want to put their people through that.”
Sims, however, said he does believe the topic will be revisited and considered next year.
“I think it has a chance next year,” Sims said.