Pay raises for public school teachers and employees are unlikely to be mandated in the next two-year state budget approved by the Senate and House, Republican legislative leadership told reporters on Wednesday.
House Speaker David Osborne (R-Prospect) said in a joint press conference with Senate President Robert Stivers (R-Manchester) that while he expects the budget to include “significant funding” to local school districts that could be used for teacher and other public school employees raises at the discretion of local boards, “I think you’re going to see us stop short of mandating raises for particular classes of employees.”
“I believe those are decisions best made at the local level,” said Osborne. “I certainly believe and hope that they will use that money to give teacher raises.”
The comments came after Gov. Andy Beshear proposed 11% raises for all public school employees, including certified staff, in his televised December budget address. Those raises are specifically earmarked in the governor’s budget proposal filed in the House Wednesday in House Bill 114.
Exactly how much the legislative budget will propose for public school districts remains to be seen. Kentucky House Republicans are expected to release their budget proposal as soon as next week.
A ‘collaboration’
Stivers and Osborne told reporters that their session priorities – a “collaboration” of both chambers – include workforce development through increased partnership with Kentucky’s community and technical college system, improved health care access, criminal justice reform, and shoring up Kentucky’s energy policy.
More funding for teacher raises has been a key issue in Kentucky elections for the past several years, including in 2019, when former Gov. Matt Bevin lost to Beshear after mass teacher protests largely regarding pay and pensions.
Lawmakers enacted a state budget in 2020 that increased employer matching funds for the teacher’s retirement system by roughly $418 million and boosted other P-12 education funding. New funding came with the current state budget passed in 2022, including an increase in funding to local school districts that could be used to cover raises for teachers and other employees.
Osborne said Wednesday that, at least in the House (where the budget process begins every two years), the majority of members are unlikely to support mandated pay increases for teachers or other employees at the local level.
Under Beshear’s proposal, local school districts would be required by the bill to provide 11% raises to all full-time employees in fiscal year 2024-2025. Raises for teachers and other certified staff would be in addition to increases based on professional rank as part of a roughly half-billion-dollar annual operations and support budget. The governor reiterated his support for the raises in his State of the Commonwealth speech Wednesday night.
“The Republican governor of Tennessee signed a bill last year to provide their teachers the largest pay raise in their state’s history, and Indiana is looking to do the same,” said Beshear.
“Folks, that is our competition – both to the north and to the south,” Beshear said in his address. “The budget is our opportunity, our chance, to make things right here in Kentucky.”
Stivers acknowledged competition from other states in his remarks before the speech yesterday. He said local boards would have “tools” to be competitive, reiterating Osborne’s point.
“We all know that we have to be competitive with our sister states, and competition with the private sector – and there will be a need for local level officials to have the tools to be competitive with,” said Stivers.
Chance of universal pre-K funding is slim
Any support from the Speaker and Senate President on Wednesday for universal preschool was largely absent. Kentucky now provides state-funded preschool for four-year-olds with family income at or below 160% poverty level and all three and four-year-olds with disabilities. Beshear has proposed funding pre-K for all four-year-olds statewide.
Incomes that correspond to 160% poverty under federal guidelines are $31,552 for a family of two or $48,000 for family of four in fiscal year 2023-24.
Osborne’s response to the proposal Wednesday was lukewarm.
“I don’t think there’s much appetite in our chamber for it,” he told reporters. Stivers appeared on board with that statement – a nod to earlier comments he made in the press conference about collaboration with the House throughout the session.
Details of workforce development policy and health policy funding proposals alluded to by Stivers and Osborne Wednesday are expected to become more clear when the House releases its budget in the next week or two. Healthcare access legislation expected to be filed by Rep. Kimberly Moser (R-Taylor Mill) was mentioned by Osborne as a bill to watch.
Tapping of the state’s massive $3.7 billion budget reserve trust fund, or rainy day fund, is also a possibility, the leaders said. By the end of fiscal year 2024 or late June, Osborne said Kentucky will have a “larger budget reserve than is necessary.” But neither he nor Stivers would elaborate on any specific uses for a drawdown of the fund in the 2024-2026 state budget except to say that using the fund for recurring needs – like state retiree cost of living raises – is probably not in the cards.
Stivers said both chambers intend to stay away from “silo budgets” that don’t consider the overall needs of the commonwealth.
“We want to continue to work to create the most competitive tax code because if you want to know why people want to locate here, it’s because of the things we’ve done lately to the tax code,” he said.
Recent tax changes include a trigger mechanism to gradually eliminate the individual income tax (now at 4% from 6% a few budget cycles ago). That tax rate could fall to 3.5% in future years depending on state revenue growth over expenditures (plus a 1% reduction in the income tax) and the size of the rainy day fund.
State lawmakers are now on day three of the 2024 annual legislative session, during which they will pass a roughly $130 billion overall state budget to see the state through fiscal year 2026.