Six weeks after the gavel fell adjourning the 2022 Regular Session, June 1 marks the first day of the 2022 Legislative Interim. The interim, essentially the time between the sessions, can be just as important as session as lawmakers focus on studies, oversight, and other legislative functions.
During the interim, committees prepare for session by studying issues within their jurisdiction, often hearing testimony directly from stakeholders as they research and draft the legislation we will consider when we convene the next January. In addition, legislators review and approve or disapprove proposed regulations from the executive branch.
While the vast majority of meetings take place in Frankfort, committees sometimes visit state facilities and hold public hearings outside of the Capitol. This year, members of several legislative committees met in Covington at the Northern Kentucky Convention Center. I thought I might provide a brief summary of each interim joint committee (IJC) meeting:
IJC on Economic Development and Workforce Development & IJC on Tourism, Small Business, and Information Technology: Committees can hold joint meetings to efficiently and effectively discuss issues that fall in multiple jurisdictions. Members of these two IJCs heard from Cincinnati/Northern Kentucky International Airport and the Kentucky Sustainable Aviation Fuel Coalition. According to testimony, Kentucky is home to three of the country’s largest cargo airports. This grants the state a unique opportunity to lead the way in producing and using petroleum-based jet fuel. Along with discussing alternatives to traditional kerosene-based jet fuel. Legislators also heard testimony from the Enzwiler Institute on how to best spur engagement amongst younger generations for trades like carpentry, plumbing, HVAC, etc. There is a massive shortage of skilled trade workers nationwide and the Institute is committed to actively engaging students in these fields through workshops, school presentations, offering scholarships, and certifying more teachers. Finally, the committee discussed HB 106 which addresses the issue of subscriptions and automatic renewal of those subscriptions. This bill would make businesses be clear and concise by requiring affirmative consent for automatic renewal subscriptions.
IJC on Licensing & Occupations and Administrative Regulations: Several guest speakers provided a recap of legislation that passed last session, including HB 500. This measure eliminated many of the regulatory burdens that prevented distilleries from fully capitalizing on the international Bourbon boom, which will in turn boost tourism and investments. Additionally, members heard a report regarding the $200 million investment into the new Turfway Park facility, which is expected to generate 400 full and part time jobs in the region.
IJC on Health, Welfare, and Family Services: Members discussed prescription drug affordability, the rising rates of the diabetes in Kentucky, and the infant formula shortage with health care providers and state program administrators.
IJC on Transportation: The committee heard an update on regional transportation projects, including the Brent Spence Bridge. The Brent Spence carries interstates 71 and 75 across the Ohio River into Covington. It is almost six decades old and carries over a billion dollars in freight every day, exponentially more traffic than it was originally designed to carry. The Transportation Cabinet has submitted a request for federal assistance in funding a companion bridge to help alleviate traffic safety issues and the project would be eligible for the $250 million in transportation funds we allocated for mega-projects. I have shared before how critical our roads and bridges are, not only because we drive on them daily for work, school, church, and entertainment, but also because our state lies within a day’s drive of two-thirds of the nation, making tourism a big industry.
IJC on Appropriations & Revenue: Legislators received an update on how legislation aimed at eliminating the state personal income tax is being implemented. The measure, HB 8, would lower the state’s personal income tax incrementally over a period of years until it is eliminated entirely. Before the rate is lowered, the state must meet preset triggers from a formula based on how much actual revenues exceed expenses plus the dollar value of a 1% drop in income tax. If that trigger is engaged, the personal income tax decreases by half a percentage point. Since the first decrease is measured against Fiscal Year 2021 performance, Kentuckians will see the rate lower to 4.5% on January 1, 2023. This decrease is expected to leave an estimated $500 million in taxpayer pockets to be invested and spent in local communities. According to committee testimony from legislative committee staff, the Department of Revenue and the Office of the State Budget Director will review the tax reduction conditions and report findings to the Appropriations and Revenue Committee by September 5, 2022.
IJC on Banking & Insurance: Legislators on the IJC on Banking and Insurance heard from the Kentucky Bankers Association and the Bluegrass Community Bankers Association about how inflation, labor shortages, and other economic conditions are impacting not only the industry but also credit markets. According to testimony, the industry sees financial conditions getting tougher, with economic forecasts downgrading. Anyone who has filled their gas tank or bought groceries in the past three months will be unsurprised by that, but the information is important to how we respond.
In addition, this summer and fall legislators will be working in task forces to address temporary issues that require additional focus and study. They include:
Task Force on the Cabinet for Health and Family Services Structure: Created to study the organizational structure, operations and administration of programs within the Cabinet for Health and Family Services (CHFS). This cabinet administrates many of the programs that serve our most vulnerable and account for a large portion of our budget, including Medicaid, child and adult protective services, foster and kinship care, and regulated child care.
Task Force on Early Childhood Education: Members will conduct a comprehensive review of early childhood caregiving and education across the state — including public, private, in-home, and child care centers. With quality, affordable child care out of reach for many Kentucky parents, a child care industry decimated by the pandemic and the state’s shutdown, and almost half of Kentucky children unprepared for kindergarten, this is an important issue.
Task Force on Public Assistance Benefits Cliff: This work group will review the impact of the benefits cliff — a term used to describe when an individual loses eligibility for a benefit like child care or health coverage due to a wage increase or employment — on labor force participation, wages, employment, and benefit duration. Ultimately, we want to know if the benefits cliff plays a role in the fact almost half of Kentuckians who should be working are not.
Task Force on Emergency Medical Services (EMS): Lawmakers on this task force will evaluate how emergency medical services are provided throughout the state. Long wait times, workforce shortages, the certificate of need process, and a need to address mental health issues have weighed heavily on those who work in emergency medical services as well as those who they serve. I look forward to the results of this study.
Task Force on Bourbon Barrel Taxation: This panel will delve into the current ad valorem tax rate structure for Bourbon barrel sales. Bourbon’s status as a signature industry is undeniable, with hundreds of thousands traveling here to enjoy the Bourbon trail and other related activities. We want to remove regulatory burdens in order to keep creating jobs and economic opportunities, but we must make sure we adopt the best policies for all Kentuckians.
Task Force on Executive Branch Efficiency: Created to review the effectiveness of the executive branch’s cabinet and how effectively and efficiently it provides services to the people of Kentucky, the members on this task force will look for ways to streamline necessary services and bring more accountability. While lawmakers can meet our responsibility to pass strong budgets that invested tax dollars wisely, our role as stewards of your tax dollars and resources continues as we hold state government accountable.
I cannot stress enough how critical the interim is. I have heard it compared to the time you take preparing for an exam, with session being the ultimate test. Many have described the past session as one of the most successful in modern history, with the results measured in policies that will benefit Kentuckians for generations. We passed a budget that makes historic investments in education and infrastructure, a tax modernization plan that gradually eliminates the personal income tax, and legislation that protects Kentucky values. As we continue our work this interim, I am hopeful that we can build on this year’s session.
If you are interested in keeping up with legislative committees, work groups, and task forces, the meetings are open to the public with materials available at legislature.ky.gov. While lawmakers must be physically present to participate in the meeting, members of the public may attend in person or watch meetings live on YouTube@KY LRC Committee Meetings or Kentucky Educational Television at ket.org/legislature. In the meantime, I can be reached through the toll-free message line in Frankfort at 1-800-372-7181 or on my mobile at 502-639-7079. Feel free to contact me via email at James.Tipton@lrc.ky.gov. If you would like more information, please visit the LRC website legislature.ky.gov.