Thursday, April 2, 2020

Lawmakers pass one-year budget, including pension reprieve for health departments; funding remains similar to last year's budget

By Melissa Patrick
Kentucky Health News

Amid an expected revenue shortfall from the coronavirus pandemic, Kentucky lawmakers passed a conservative one-year budget, instead of the usual two-year one, that offers another reprieve for health departments in a year that they were looking to enact big reforms.

The budget will freeze pension contribution rates for health departments, regional universities and quasi-governmental agencies at 49.47 percent of payroll, allowing them to dodge for another year the looming 93% rate that was set to kick in on July 1.

Many health departments have said that rate would force them to close. The legislature was planning to revamp the contribution system, but the uncertainty about state revenues killed that idea, at least for now.

"While this budget doesn’t provide the language or funds to support our public health transformation and ensure the number of foundational employees to meet our statutory obligations, we understand as well as anyone the uncertainty of our times and recognize the legislatures need to try and maintain current operations for all government another year," Randy Gooch, executive director of the Jessamine County Health Department, said in an e-mail. "However, I have great confidence the legislature will now have more clarity than ever of the need to fund public health at a an appropriate level and will take that action when considering changes to the budget in the future."

The budget provides $23 million for regional mental health boards' pension payments and $25.4 million for health departments' pension payments. The overall budget for public health remains about the same as the previous budget, around $370 million.

Health departments, state health officials and legislators worked for months to help the departments afford their pension obligations, and were nearing success when the coronavirus hit, making likely a huge drop in state revenues. Costs are expected to rise, too, and exactly how much financial help the state will get from federal government remains an unknown.

"We have no way to know how far this recession is going to go, how deep it will truly be and what it will mean to the coffers here in Frankfort," House budget chair Steven Rudy, R-Paducah, said on the House floor while offering the House-Senate compromise budget bill April 1.

All of this has resulted in a one-year budget for the fiscal year that begins July 1 that largely keeps spending at current levels, with plans to pass a budget next year for the 2021-22 fiscal year.

Here are some of the health-related provisions in the budget:

From the Tobacco Settlement Fund:
  • $500,000 for a rural mental-health and suicide-prevention pilot program 
  • $1.4 million for substance-abuse prevention and treatment for pregnant women with a history of substance abuse 
  • $7 million for the Health Access Nurturing Development Services Program (HANDS)
  • $942,000 for Healthy Start initiatives
  • $942,000 for early childhood mental health 
  • $989,100 for early childhood oral health
  • $2 million for smoking cessation, much less than advocates want  
From the General Fund:
  • $93,700 each for grants to the Brain Injury Alliance of Kentucky and the Epilepsy Foundation of Kentuckiana to help veterans who have experienced brain trauma
  • $7.4 million for more school-based mental health services
  • $300,000 in the current fiscal year and $1.9 million in the next one for the Kentucky Poison Control Center, which operates the recently created covid-19 hotline
  • $500,000 for the Kentucky Colon Cancer Screening Program 
  • $2.5 million to the Kentucky Pediatric Cancer Research Trust Fund
  • $500,000 for ovarian cancer screening
The budget does not provide any money for additional social workers, or raises for social workers, as had been included in all previous versions of the budget. It also lacks any new waivers for community-based care for individuals with disabilities, as all previous versions had provided.

The General Assembly will reconvene April 13 to reconsider bills Beshear vetoes. House Speaker David Osborne said that more bills are also likely to get passed, including one to help rural hospitals.

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