WELCOME TO "KENTUCKY TONIGHT."

I'M RENEE SHAW.

THANK YOU SO VERY MUCH FOR JOINING US.

TONIGHT A DISCUSSION ABOUT THE STATE BUDGET.

LAST THURSDAY, TH REPUBLICAN-LED HOUSE PASSED A TWO-YEAR BUDGET.

IT INCLUDES A PAY RAISE FOR STATE WORKERS AND MORE MONEY FOR EDUCATION, BUT NOT AS MUCH AS GOVERNOR BESHEAR WOULD HAVE LIKED.

THE BUDGET STILL NEEDS ACTION BY THE KENTUCKY SENATE.

WITH MORE ON WHAT'S IN THAT BUDGET, AND WHAT ISN'T, WE ARE JOINED IN OUR LEXINGTON STUDIO BY: REPRESENTATIVE JASON PETRIE, REPUBLICAN FROM ELKTON AND CHAI OF THE HOUSE APPROPRIATIONS AND REVENUE COMMITTEE, REPRESENTATIVE JOSIE RAYMOND, DEMOCRAT FROM LOUISVILLE AND MEMBER OF THE HOUSE APPROPRIATIONS AND REVENUE COMM ANNE-TYLER MORGAN, ATTORNEY AND MEMBER AT MCBRAYER AND SENIOR FELLOW AT THE PEGASUS INSTITUTE AND JASON BAILEY, EXECUTIVE DIRECTOR OF THE KENTUCKY CENTER FOR ECONOMIC POLICY.

WE WANT TO HEAR FROM YOU TONIGHT, SO SEND US A question OR COMMENT ON TWITTER @KYTONIGH SEND AN EMAIL TO KYTONIGHT@KET.

OR USE THE WEB FORM AT KET.ORG/ MAKE SURE TO CHECK THE BOX THAT SAYS YOU ARE NOT A ROBOT.

ROBOT OR YOU CAN GIVE US A CALL WELCOME TO ALL OF OUR GUESTS.

APPRECIATE YOU BEING HERE.

I KNOW YOU'VE HAD A LONG DAY PERHAPS OR NOT SO LONG IN CHAMBERS TODAY AND BE FOLLOWING ALL THE ACTION THAT'S HAPPENING, HERE WE ARE ON DAY 14 I THINK IS IT?

WE'RE ALMOST A THIRD OF THE WAY THERE?

>> ALMOST.

>> ALMOST.

SO REPRESENTATIVE PETRI, FIRST OF ALL THANK YOU FOR BEING HERE.

I THINK THIS IS YOUR APPEARANCE TO "KENTUCKY TONIGHT."

>> IT IS, AND THANK YOU VERY MUCH FOR HAVING ME.

>> WE'RE GLAD TO HAVE YOU.

THE NEWBIE GETS THE FIRST QUESTION.

THAT'S HOW IT USUALLY GOES.

NO.

THE UNPRECEDENTED PACE, WE'VE HEARD A LOT ABOUT I SCANT REMEMBER A TIME WHEN THERE'S BEEN A BUDGET THAT PASSED THE COMMITTEE AND THE HOUSE CHAMBER IN 12 DAYS, AND I KNOW THAT YOU'VE HEARD A LOT FROM YOUR DEMOCRATIC COUNTERPARTS ABOUT THE SWIFT NATURE OF PASSING THE BUDGET, SO BEFORE WE GET INTO THICS SPECIFICS OF THE BUG, LET'S TALK ABOUT THE PROCEDURE, THE PROCESS AND THE TIMELY INFORMS IT.

>> AS YOU KNOW, RENEE, JANUARY THE 7th IS WHEN THE BILL WAS FILED, BUT REALLY IT WAS A CULMINATION OF ABOUT EIGHT MONTHS' WORTH OF WORK.

NOT INTENDED EARLY ON TO BE THE BUDGET, BUT THE ISSUES STARTED WORK THAT EARLY ON.

SO WHEN YOU TAKE WHAT WOULD NORMALLY BE DONE IN SESSION IN JANUARY OR FEBRUARY AND YOU DO IT ALL IN THE INTERIM PRIOR, IT SEEMS LIKE IT'S MOVING REALLY FAST, BUT IN SOME SENSES IT'S NOT.

STAKEHOLDER INPUT, FILED A BILL TWO WEEKS OUT, RECEIVE INPUT, AND WE PASS IT OUT AND NEXT STEP ONTO THE SENATE.

>> SO HAVE YOU TALKED TO THE SENATE A&R CHAIR CHRIS MCDANIEL?

DO YOU HAVE ANY SENSE ABOUT WHAT THE GOP CAUCUS THERE LIKES ABOUT THE BILL, WHAT THEY MIGHT CHANGE?

HAVE YOU HAD ANY CONVERSATIONS TO THAT EFFECT SO FAR?

>> OH, I WISH I KNEW.

[LAUGHTER] I WISH I KNEW.

THE SENATE JUST, LIKE OURSELVES, THEY HAVE THEIR OWN PRIORITIES.

THE WAY DIFFERENT INCLINATIONS TOWARD HANDLING CERTAIN ISSUES IN CERTAIN WAYS.

IT WILL BE INTERESTING TO SEE WHAT PRODUCT THEY COME BACK WITH.

I BET IT WILL BE A GOOD ONE, MAYBE NOT AS GOOD AS THE HOUSE BUT IT WILL BE A GOOD PRODUCT.

>> WE ALWAYS HEAR THAT, RIGHT?

AND IT'S USUALLY INEVITABLE.

I THINK WE CAN ALL AGREE THAT TO GO TO CONFERENCE COMMITTEE OR NEGOTIATIONS, AS MIGHT BE MORE LAYMAN TERM FOR THAT, IS JUST PART OF THE PROS PROCESS.

WHAT YOU'RE DOING WAS THE FIRST DRAFT AND THERE WILL BE MANY, MANY MORE REVISIONS TO COME.

SO REPRESENTATIVE JOSIE RAYMOND, YOU WERE THE ONE WHO TALKED, AS DID YOUR OTHER DEMOCRATIC COLLEAGUES, ABOUT KIND OF THE SWIFT NATURE, WHAT'S THE RUSH, AND THERE WERE ALSO PERHAPS MISSED OPPORTUNITIES IN THE BUDGET, THAT THIS IS THE TIME BECAUSE OF FLUSH OF CASH TO MAKE SOME BIG BOLD INVESTMENTS.

WHAT DO YOU THINK IS GOOD ABOUT THE BUDGET?

AND WHAT ARE OTHER MISS OPPORTUNITIES IN YOUR EYES?

>> SURE.

I WANT TO COMMENT FIRST ON THE SPEED WITH WHICH WE SAW THE BUDGET AND PASSED IT, AND THE HOUSE REPUBLICAN MAJORITY TOOK UNDER THE PRECEDENTED STEP OF FILING A BUDGET BEFORE WE HAD HEARD FROM THE GOVERNOR IN HIS BUDGET ADDRESS.

I THINK IT WAS A MISTAKE BECAUSE THE GOVERNOR, OF COURSE, REPRESENTS ALL 4.4 MILLION KENTUCKIANS WHEREAS EACH HOUSE HAS ON GOT ABOUT 45,000, AND HE REPRESENTATIVES THEM ON A FULL-TIME BASIS, WHEREAS WE'RE PART-TIME LEGISLATORS, SO HE'S NOT INSIGHTS IN EXECUTIVE BRANCH THAT ARE VALUABLE TO US AS WE CRAFT THE BUDGET IN THE HOUSE.

THIS BUDGET IS A SOLID FIRST DRAFT.

IT WAS THOUGHTFULLY DONE, ABSOLUTELY.

IT DOES NO HARM.

THERE ARE NO CUTS IN THIS BUDGET, AND THAT'S THE FIRST TIME WE CAN SAY THAT IN 16 YEARS.

IN KENTUCKY.

IT BASICALLY TAKES THE LAST ENACTED BUDGET FROM THE LEGISLATURE AND ADDS FUNDING TO EVERY SINGLE LINE ITEM.

THERE'S A LOT OF GOOD THING IN IT, A 6% RAISE FOR STATE WORKERS, RETENTION BONUSES, RAISES AND NEW POSITIONS FOR SOCIAL WORKERS, WHICH WE BADLY NEED, RAISES FOR STATE TROOPERS AND PUBLIC DEFENDERS.

THERE'S AN INCREASE IN SEEK FUNDING, SCHOOL TRANSPORTATION, AND IT FUND FULL-DAY KINDERGARTEN AND IT PUTS HUNDREDS OF MILLIONS OF DOLLARS ABOVE WHAT IS REQUIRED INTO OUR PENSIONS.

THERE'S A LOT TO LIKE HERE BUT THERE'S A LOT MORE OPPORTUNITY.

>> WHAT WHAT DO YOU HOPE THE SENATE WILL DO?

WHAT WOULD YOU LIKE TO SEE ADDED OR THE FINAL PROJECT?

>> I SURE DON'T THINK THEY'RE GOING TO DO IT WHAT I WANT THEM TO DO.

>> WHAT WOULD YOU LIKE TO SEE IN THE FINAL VERSION OF THE BILL?

>> SO I VOTED NO IN THE HOW LAST WEEK ON THIS VERSION OF THE BUDGET, AND I'LL TELL YOU WHY.

EVEN THOUGH THERE'S FUNDING INCREASES, IN MY OPINION IT LACKS VISION.

THIS IS A SINGULAR OPPORTUNITY IN KENTUCKY, THANKS TINE FLUX IN FEDERAL FUNDS FROM DEMOCRATS IN WASHINGTON, AND WE'VE GOT AN OPPORTUNITY TO MAKE TRANSFORMATIVE INVESTMENTS IN KENTUCKY FOR THE FIRST TIME IN OUR MEMORY AND IN OUR SERVICE IN THE LEGISLATURE FOR SURE.

WE COULD HAVE UNIVERSAL PRE-K FOR ALL OF OUR THREE AND FOUR-YEAR-OLD WHICH I THINK IS THE THING THAT WOULD DO THE MOST GOOD FOR THE MOST PEOPLE.

WE COULD HAVE PAID FOR TWO YEAR COMMUNITY COLLEGE SCHOLARSHIPS.

WE COULD HAVE LOAN FORGIVENESS FOR FUTURE NURSES AND TEACHERS.

WE COULD THINK REALM BIG.

WE DO HAVE A LIGHT RAIL SYSTEM BETWEEN LOUISVILLE, METRO KENTUCKY WE COULD HAVE THE TOP CANCER CENTER.

WE COULD HAVE THE BEST PAID TEACHERS IN AMERICA.

DIDN'T SEE BIG THINKING IN THIS VERSION OF THE BUDGET, THE IN EVEN BIG THINKING THAT I DISAGREED WITH.

YOU SAID IT YOURSELF, CHAIRMAN PETRI, THIS BUDGET NEEDS THE NEEDS OF KENTUCKY AND NOTHING ELSE.

I THINK THAT'S A MANAGES TAKE.

IF WE DON'T SEIZE THIS OPPORTUNITY WE'RE GOING TO REGRET IT.

>> HE SAID THE NEEDS AND NOT THE WANTS YOU WHICH IS THE DIFFERENCE, AND YOU CLARIFIED THAT POINT TO BE INVESTMENTS THAT YOU THOUGHT WERE THE NEEDS AND NOT THE WANTS, BUT OF ALL THE THINGS THAT REPRESENTATIVE RAYMOND JUST LISTED, DID YOU GIVE ANY CONSIDERATION TO SOME OF THOSE THINGS?

>> THERE WAS CONVERSATION EVER CONSIDERATION GIVEN TO A WIDE SPECTRUM OF ISSUES, AND SO WHEN YOU GET DUNE TO BUDGETING FOR NEEDS, YOU DO TAKE A LOT OF YOUR CUE FROM PRIOR BUDGETS.

THAT'S WHERE YOUR ISSUES ARE, THE PRIORITIES WERE STATED.

WE TOOK NOTE OF THOSE ISSUES LAST SESSION.

WE FOLLOWED AND TALKED WITH THE EXECUTIVE BRANCH AS BEST WE COULD TO SEE WHAT THEY THOUGHT PRIORITIES WERE.

WE TRIED TO TAKE CUES FROM EVERYWHERE TO SEE IF WE WERE COVERING ENOUGH GROUND AND MAKING SURE WE WERE CONSIDERING.

BUT WHERE WE ULTIMATELY COME BACK DOWN IS NEEDS VERSUS WANTS, AND THOSE NEEDS DO INCLUDE INVESTMENTS.

IT'S NOT JUST THE BARE NECESSITIES AND KEEP THE REST OF IT.

THERE'S A LOT OF PUSH, BUT YOU HAVE TO BE CAREFUL IN HOW YOU BUDGET AND PUSH AND INVEST, AND I HEAR THIS STUFF ABOUT BE BOLD, BE BRAVE, BE BOLD, BE BIG.

OKAY.

BUSINESSES NEED STEADY PLANNING AND STEADY GROUND IN ORDER TO MOVE THEMSELVES FORWARD.

FAMILIES NEED THE SAME THING.

STATE GOVERNMENT HAS TO HAVE THE SAME.

AND LOCAL GOVERNMENT HAS TO HAVE THE SAME.

SO INCREMENTAL CHANGE TO THE GOOD, SMART, PRUDENT INCREMENTAL CHANGE IS GOING TO BE THE BEST.

WHEN YOU'RE LOOKING TO -- I'M JUST GOING TO USE THIS EXAMPLE.

WHEN YOU'RE LOOKING TO PLANT A CROP IN A GARDEN OR ON A 200-ACRE FIELD, YOU DO NOT GO, WOW, WE'VE GOT A LOT OF SEED.

LET'S PUT IT ALL OUT THERE.

YOU'RE GOING TO WASTE AND IT YOU'RE GOING THE KILL THE PLANTS THAT WOULD COME UP.

YOU HAVE TO BE SMART ABOUT HOW MUCH GOES IN ON THINK GIVEN POINT TO MAKE SURE YOU GET THE BEST RETURN.

NEVER BE EVER, EVER FORGET THIS IS NOT OUR MONEY.

IT'S TAXPAYER MONEY.

WE SHOULD USE IT BETTER THAN OUR OWN.

>> AND TO THAT POINT, AND THEN I WANT TO GET THE OTHERS INVOLVED, THERE'S A $1.5 BILLION BUDGET RESERVE TRUST PUNNED BUT THERE'S ALSO A $1.142 BILLION IN UNEXPENDED, UNAPPROPRIATED DOLLARS, AND I WANT TO GET TO YOU IN JUST A MINUTE THE IDEAS FOR THAT MONEY.

ANNE-TYLER MORGAN, DO YOU BELIEVE THIS IS THE BEST POSSIBLE PRODUCT AT THIS TIME, THE FIRST DRAFT?

AND WHAT DO YOU THINK COULD COME OUT OF IT AT THE VERY END OR WHAT WOULD YOU LIKE SEE COME OUT OF IT?

>> YOU KNOW, RENEE, I THINK THAT THESE TWO HAVE ALREADY ILLUSTRATED THE THINGS THAT COME TO MIND WHEN I THINK ABOUT THIS YEAR'S BUDGET, AND THOSE ARE BALANCE AND TIMING.

WE'VE HEARD A LOT ABOUT THE UNPRECEDENTED SURPLUS THAT WE HAVE AND THE OPPORTUNITIES THAT IT BRINGS FOR TRANSFORMATIONAL INVESTMENT, BUT KENTUCKIANS ALSO FACE UNPRECEDENTED HARDSHIPS NOW THAT REQUIRE CRITICAL SPENDING, AND SO I THINK THIS BUDGET STRIKES THE BALANCE FAIRLY WELL AGAIN AS A STARTING POINT, WHICH IT, OF COURSE, IS, BETWEEN THOSE URGENT NEEDS AND THE SIGNIFICANT INVESTMENTS THAT CAN BE MADE FOR THE COMMONWEALTH.

I THINK IN TERMS OF WHAT'S TO COME, THAT UNSPENT MONEY, THE INVESTMENT THAT WE HAVEN'T TALKED ABOUT YET IS THE INVESTMENT IN TAX REFORM, AND, OF COURSE, I'M SURE THAT'LL BE A SUBJECT THAT ALL OF US WILL SPEAK ABOUT TONIGHT, BUT WHEN YOU TALK ABOUT TRANSFORMATIONAL INVESTMENT, THERE WILL NATURALLY BE DISAGREEMENT ABOUT WHAT EXACTLY THAT INVESTMENT COULD BE.

AND I THINK THAT REPRESENTATIVE PETRI SPOKE FAIRLY WELL TO THE POINT OF PLANNING WHEN IT COMES TO OUR MONEY.

WE'RE GOING IS TO SEE MORE OF THAT, I PRO PREDICT, IN THE SENATE.

THE COOLDOWN OF SPENDING MEASURES IN ORDER TO THINK LONG-TERM AND HOW WE CAN BEST SPEND THOSE FUND OVER TIME.

>> SO JASON BAILEY, I I I DON'T WANT ON TO GET TO THE TAX REFORM QUESTION TOO QUICKLY BUT I DO WANT TO MAKE A POINT THAT WAS MADE IN THE HOUSE DURING THE DISCUSSION IN COMMITTEE AND ON THE HOUSE FLOOR, THAT WE DO HAVE THIS MONEY THAT'S AVAILABLE BUT THE TAXPAYERS SHOULD ALSO REAP SOME OF THE BENEFITS THIS MONETARY REWARD THAT KENTUCKY IS NOW EXPERIENCING.

SO BEFORE WE GET TO THAT POINT, WHAT DO YOU SEE AS GRANGERLY MISSING, FROM YOUR PERSPECTIVE, IN THIS BUDGET?

SHOULD IT BE MORE RAISES FOR STATE WORKERS OR A SECOND YEAR OF A RAISE FOR STATE WORKERS OR MORE SPENDING AND INVESTMENT IN EDITION?

WHAT SAY YOU?

>> YOU YEAH, I THINK THERE'S TWO IMPORTANT CONTEXT PIECES TO UNDERSTAND WITH THAT THIS OPPORTUNITY IS.

ONE, IS WE HAVE THIS ONCE IN A GENERATION STRONG REVENUES COMING IN THE SURPLUS AND JUST THE STRONG REVENUE GROWTH.

THE OTHER, THOUGH, BACKDROP IS THAT WE HAVE BEEN CUTTING OUR BUDGET 20 TIMES SINCE 2008.

WE'VE HAD BUDGET CUTS.

AND WE HAVE DECIMATED IN SOME WASTES CORE SERVICES, 15 TO 50 PERCENT LESS THAN WE PUT IN BEFORE THE GREAT RECESSION IN SOME OF THOSE CORE SERVICES.

WE'VE LOST 20% OF OUR EMPLOYEES.

WE HAD ABOUT 7,000 POSITIONS OPEN NOW BECAUSE WE DON'T PAY PEOPLE ENOUGH IN THE EXECUTIVE BRANCH AND WE'VE GOTTEN RID OF THEIR DEFINED BENEFIT RESENSE SO WE TONIGHT AT ATTRACT AND RETAIN THE WORKFORCE WE NEED.

THERE ARE TWO REASONS I THINK THAT WE NEED TO BE BOLD.

ONE IS THAT THERE'S A LOT OF GROUND TO MAKE UP IN TERMS OF THE CUTS THAT HAVE HAPPENED IN THE PAST.

AND TWO IS THAT THIS IS A ONCE-IN A GENERATION OPPORTUNITY WHERE WE CAN CHANGE THE TRAJECTORY OF STATE IF WE PUT MORE MONEY INTO THINGS LIKE PRESCHOOL THAT WE KNOW PAY OFF, IF WE PUT MORE MONEY INTO MAKING COLLEGE MORE AFFORDABLE, ET CETERA.

SO I THINK THERE'S SOME BRIGHT SPOTS IN THIS BUDGET.

THIS IS THE FIRST TIME THAT WE HAVE UNDER IS EVER FUNDED ALL THE SCHOLARSHIPS WE'RE SUPPOSED TO.

THERE'S MONEY FOR FAMILY AND YOUTH SERVICES.

ALL-DAY KINDERGARTEN IS COMPLETE.

THERE ARE GOOD THING BUT THEY'RE INCREMENTAL AND MODEST GIVEN THE OPPORTUNITIES WE HAVE WITH THIS SURPLUS, AND THE NEEDS WE HAVE FROM ALL THOSE CUTS.

>> S. THE K THROUGH 12 SEEK FUNDING DO YOU THINK THAT'S ENOUGH WHERE IT GOES FROM 4,000 TO $42,000.

>> IT'S 100 BUCKS A YEAR.

IT'S MODEST.

IF YOU LOOK A HOW MUCH WE'LL BE PUTTING INTO THE BASE SEEK, THE CORE FUNDING FORMULA IN 2024, IT'S $50 MILLION LESS THAN WE PUT IN 16 YEARS EARLIER.

THAT'S A 30% CUT ONCE PUT IN IT INFLATION, ONCE YOU ADJUST FOR INFLATION.

SO WE HAVE A LOT OF GROUND TO MAKE UP, AND IF WE SQUANDER THIS OPPORTUNITY BY TAKING THIS $1.1 BILLION THAT'S BEING SET ASIDE, NOT PUTTING IT IN THE BUDGET RESERVE TRUST FUND, GIVE IT AWAY IN TAX CUTS, THESE ARE TAX CUTS THAT GO ON BEYOND THIS LEGISLATIVE SESSION, WE HAVE LOST THE OPPORTUNITY TO CHANGE THE TRAJECTORY THAT WE'VE BEEN ON.

>> CHAIRMAN PETRIE, I WANT TO GET TO THE YOU CAN EXPEND UPPED PUNNED BUT THIS QUESTION, IS THERE A STATE FOR STATE RETIREES?

, QUOTE/UNQUOTE, BEEN A LONG TIME EXCLAMATION POINT.

>> I ASSUME HE'S TALKING ABOUT COLAS OF SOME SORT.

>> COST OF LIVING ADJUSTMENTS.

>> THERE WAS DISCUSSION ABOUT COLA AND I THINK WE TOOK THAT UP IN A BUDGET SUBCOMMITTEE ONCE OR TWICE.

LIGHTEN THE FINAL DISCUSSION WAS TO FOCUS ON THE MORE PRESSING NEEDS OF WORKFORCE RETENTION AND RECRUITMENT IN CERTAIN KEY AREAS IN STATE GOVERNMENT AND OTHER PLACES.

THE COLA ISSUE IS NOT LOST.

IT'S NOT GONE.

BUT FOR THIS SESSION, AS FAR AS THE HOUSE VERSION THAT COMES OUT, OTHER THING WERE FOCUSED, UNFORTUNATELY IT'S ALL A MATTER PRIORITIES AND THOSE OTHER ONES WERE DEALT WITH.

>> AND ONE OF THE POINTS I THINK I HEARD YOU SAY, CHAIRMAN PETRIE OF THIS 1 POINT WEREN'T $4 BILLION THERE ARE OTHER BILLS THAT ARE GOING TO BE COMING ACROSS THE DESK THAT YOU WANT TO HAVE SOME WIGGLE ROOM IN.

YOU'VE ALREADY DONE THE $200 MILLION FOR THE WESTERN KENTUCKY RELIEF PACKAGE.

THERE COULD BE SOME SCHOOL CHOICE, SCHOLARSHIP TAX CREDIT STUFF OR OTHER KIND OF INVESTMENTS.

DO YOU SEE THAT ON THE HORIZON?

CAN YOU SPECIFY WHAT WE MIGHT BE SEEING IN TERMS OF WHAT COULD ABSORB A PORTION THAT OF $1 BILLION?

>> THERE ARE A PLETHORA OF BILLS THAT HAVE ALREADY BEEN FILED THAT COULD BE, AND I'LL JUST NAME ONE.

I THINK IT'S 226, READ TO SUCCEED, THAT REPRESENTATIVE TIPTON HAS MAYBE HAS A 10 MS. OR $11 MILLION PRICE TAG TO IT ONCE THE APPROPRIATION IS FINISHED.

WE'VE STILL WORKING ON THAT.

THAT'S A RELATIVELY SMALL ONE BUT ONE THAT MAY VERY WELL HAVE TRACTION THAT MOVES THROUGH.

WE'VE GOT BROADBAND ISSUES.

WE'VE GOT SEVERAL ISSUES.

BUT I DON'T WANT TO MISLEAD.

I DON'T WANT TO MISGUIDE.

THAT $1.1 BILLION IN UNAPPROPRIATE FUNDS OVER THE CURRENT YEAR OF THE NEXT TWO YEARS OF THE BIENNIUM, THAT IS A BENCHMARK OF HOW MUCH OF THAT DO WE NEED TO DIP INTO.

HOW MUCH SHOULD BE RETURNED TO TAXPAYERS?

HOW MUCH SHOULD GO TO OTHER PROGRAMS OR OTHER NEEDS OR WANTS AT THIS POINT?

AND THAT'S -- I MEAN, THIS IS WHAT WE HAVE DISCUSSION ABOUT ALL THE TIME, PRIORITIES AND PRIORITIES ARE ALWAYS SHIFTING.

>> SO HAVE YOU ALREADY DECIDED HOW TO DIVVY UP THAT PIE INCOME YOU GIVE A PERCENTAGES?

>> THE $1.1 BILLION?

>> YES.

>> NO, NO DEFINITE PERCENTAGE, AND PARTS OF IT IS I'M WAIT TO SEE WHAT THE SENATE'S PRIORITIES ARE, HOW MUCH OF THAT IS LEFT IF ANY.

I THINK WE NEED TO TAKE A VECTOR APPROACH ON IT REGARDLESS OF WHATEVER WE CAN DO TO STEER TOWARD NEEDS AND AWAY FROM WANTS AND WHATEVER CAN BE TURNED TO TAXPAYERS OUGHT TO BE A GOAL OF OURS.

>> SO CAN YOU TELL ME WHAT IN THE GOVERNOR'S BUDGET TO YOU APPEARED TO BE A WANT AND NOT A NEED?

>> EVERYTHING IS A VARYING DEGREE OF WANT AND NEED.

I AM WEEKS YOU CAN TAKE EVERY SINGLE PROJECT THAT ANYONE WOULD TALK ABOUT AND I CAN MAKE A GREAT CASE FOR IT'S A NEED, BUT WE HAVE TO PRIORITIZE EACH OF THOSE NEEDS, AND I'VE SAT DOWN AND SPOKEN WITH BUDGET DIRECTOR HICKS AND SENIOR ADVISER ADKINS AND GONE OVER WHAT THEY THINK OUT OF THEIR OWN BUDGET IS WANT VERSUS NEEDS, AND I'M NOT GOING TO DISCLOSE THAT BUT IT'S AN ONGOING DISCUSSION OF WHAT THOSE THINGS ARE GOING TO BE.

>> RIGHT.

SO TO THAT QUESTION ABOUT THE COMMUNICATION AND IF INVOLVEMENT OF THE MINORITY PARTY I MEAN, AND THERE WERE A FEW OF YOU WHO VOTED AGAINST THE BUDGET, NOTUT ALL OF THE DEMOCRATS VOTED AGAINST IT, AND SO I'M JUST CURIOUS ABOUT IF WE CAN DIND KIND OF SELLING WITH A INTO THE TAX REFORM AND I KNOW WE'LL BE VACILLATING BACK AND FORTH, WHAT KIND OF DISCUSSIONS DO YOU HOPE DO COME AROUND WITH REGARD TO TAX REFORM.

THERE'S ONE VERSION OF TAX REFORM.

>> TAX REFORM CAN MEAN A WHOLE LOT OF THINGS.

FOR ME IT MIGHT MEAN LET'S START TAXING M'M FARES SO WE CAN FUND PRE-K FOR FOR SOMEONE ELSE IT MIGHT MEAN LETS GIVE A TAX CUT TO JOHN CALIPARI.

AND THAT'S WHAT I FA WE'RE GOING TO DO IN THIS SESSION, WE'RE GOING TO SQUANDER AWAY $1 BILLION THAT CAN TRANSFORM KENTUCKY.

WE'RE GOING TO BENEFIT THE WEALTHY AND IT'S GOING TO BE FLEETING.

TO BELIEVE WE REALLY HAVE $1 BILLION SITTING AROUND, THOUGH, WE'D HAVE TO ACCEPT THAT WE HAVE MET THE NEEDS OF KENTUCKY, AND I WOULD ARGUE IN THIS BUDGET WE HAVE NOT, RIGHT?

WE HAVEN'T CLOSED RACIAL WEALTH GAPS IN KENTUCKY.

WE HAVEN'T ENDED HEALTH DISPARITIES.

WE SURELY HAVE NOT SOLVED PANDEMIC LEARNING LOSS.

WE DON'T EVEN HAVE A WATERFRONT PARK IN LOUISVILLE'S WEST END.

AND FURTHERMORE, I'D SAY KENTUCKIANS DESERVE SOME WANTS.

>> SUCH AS?

>> WELL, WE CAN'T -- >> UofL BASKETBALL COACH.

>> SERVICES WITH TAX EXHIBITS MIGHT SPEND A COUPLE HUNDRED DOLLARS ON A NICER COUCH IF I GET A TAX CUT FROM THE GENERAL ASSEMBLY BUT I AGAIN AT AN EARNED INCOME TAX CREDIT.

I CAN'T BUILD A PREMIER POST-SECONDARY SYSTEM THAT'S GOING TO KEEP YOUR KIDS AND MINE IN KENTUCKY.

THESE ARE THE SORTS OF THINGS THE GENERAL ASSEMBLY HAS AN OPPORTUNITY TO INVEST IN, THEY'RE LOOKING FOR TO US TO DO THAT.

>> WE HEARD A LOT ABOUT THE CHILD CARE CRISIS, THAT THE REASON SO MANY WOMEN OR PRIMARY CAREGIVERS COULD NOT RETURN TO WORK IS BECAUSE THEY COULDN'T AFFORD CHILD CARE.

IS THERE ANYTHING IN THE HOUSE VERSION OF THE BUDGET THAT TRACY THAT PARTICULAR DILEMMA?

>> NOTHING IN THE BUDGET.

NO, I DON'T THINK THERE'S ANY MORE THAN THE NORMALS.

I WILL TELL YOU THAT THERE'S AT LEAST ONE OR TWO MEMBERS OF THE HOUSE THAT ARE WORKING ON THAT ISSUE OF THE REPUBLICANS CAUCUS AND I HAVE BEEN CONSULTING WITH THEM TO TRY TO HELP THEM ON THE APPROPRIATION SIDE OF HOW THAT MIGHT WORK OUT BEST, BUT I WANT TO GO BACK TO THERE'S AN OVERARCHING THEME THAT'S DEVELOPING HERE AND IT'S NOT FRUSTRATING BUT IT'S INTERESTING TO ME.

WE HAVE MONEY.

THROW IT OUT THERE.

THROW IT AT SOMETHING.

YOU MIGHT NOT HAVE A GOOD PLAN OF HOW WE'RE GOING TO DO IT AND HOW WE'RE ACTUALLY GOING TO MAKE SURE IT'S TAKEN CARE OF, ADDRESSED EFFICIENTLY AND EFFECTIVELY, BUT IF THERE'S A PROBLEM, THROW MONEY AT IT.

WE HAVE THE MONEY.

AND IF WE DON'T THROW THE MONEY, THEN WE'RE NOT DOING EVERYTHING WE CAN DO.

WELL, I DON'T WANT TO THROW MONEY.

IT'S NOT MY MONEY.

AND I WANT TO MAKE SURE WHATEVER WE DO, THERE'S FORETHOUGHT PUT IN.

THERE IS A PLAN IN PLACE.

THERE IS A FEEDBACK LOOP TO SEE WHAT EFFECTIVENESS IT HAS SO THAT YOU CAN CONTINUE TO USE THAT MONEY TO THE MAXIMUM BENEFIT FOR KENTUCKIANS AND WHAT SERVICES GOVERNMENT SHOULD BE RENDERING BACK.

BUT I REALLY CAUTION PEOPLE, JUST BECAUSE THERE'S MONEY ON THE TABLE DOESN'T MEAN YOU HAVE TO THROW IT AT A PROBLEM.

IT'S BETTER TO HAVE A PLAN THAT'S DEVELOPED AND INCREMENTALLY MOVED TOWARD THAT.

SOME THING YOU HAVE TO MOVE FAST, VERY FAST, BUT VERY FEW IN LIFE TO BE HONEST.

>> REPRESENTATIVE JESSIE RAYMOND, I KNOW THE POLITICS OF INCREMENTALISM MIGHT NOT BE -- >> NOBODY WANTS TO BLOW MONEY BUT AT SOME POINT IT'S FISCALLY IRRESPONSIBLE TO SIT ON MONEY THAT COULD BE PUT TO WORK FOR US.

THAT'S THE EQUIVALENT OF PUTTING IT UNDER OUR MATTRESS.

YOU HEARD THAT CHILD CARE WAS A MAJOR OVERSIGHT IN THIS BUDGET.

THERE WERE CHALLENGES IN THE CHILD CARE INDUSTRY BEFORE COVID.

JEFFERSON COUNTY HAS NO LOST 15% OF OUR CHILD CARE SLOTS SINCE COVID.

DAYCARE DIRECTOR WILL TELL YOU THEY GET SEVERAL CALLS A DAY FROM MOTHERS WHO ARE COLLEAGUE CRYING, SAYING I HAVE A JOB WAITING BUT I CANNED FINITE CHILD CARE.

DURING THE INTERIM MANY OF MY REPUBLICAN COLLEAGUES BEMOANED DEVELOPMENTAL DELAYS AND LEARNING LOSS CAUSED BY CLOSED SCHOOLS AND CLOSED DAYCARES, AND I WAS HOPEFUL THEY'D BRING THAT FIRE AND THAT PASSION INTO THIS LEGISLATIVE SESSION, AND WHAT DO YOU KNOW, IT LOOK LIKE IT WAS JUST AN OPPORTUNITY TO ATTACK THE GOVERNOR.

WE NEED TO INVEST, NOT TO DO PARENTS A FAVOR, BUT TO SHORE UP A CHILD CARE SYSTEM THAT IS TOO IMPORTANT TO FAIL.

HIGH QUALITY EARLY CHILDHOOD EDUCATION IS THE SINGLE MOST IMPORTANT THING WE COULD DO FOR KIDS.

PRE-K CUTS CHILD ABUSE RATES, CUTS TEEN PREGNANCY, CUTS YOUTH VIOLENCE, CUTS SPECIAL EDUCATION, CUTS CRIME, BUT UNFORTUNATELY BECAUSE OF THE BACKWARDS THINKING OF A HANDFUL OF MEN IN THE LEGISLATURE WHO THINK WOMEN SHOULDN'T EVEN BE IN THE WORKFORCE, WE'RE NOT INVESTING IN IT.

>> SO OF OF THEREs, CHAIRMAN PETRIE WHO ARE WORKING ON THE CHILD CARE ISSUE, WOULD THEY REPRESENT THE IDEAS OF REPRESENT RAYMOND WHO MIGHT HAVE SOME INPUT ON THAT?

>> I'M GOING TO ASSUME SOME OF IT BUT WE'RE GOING TO HAVE TO GET PAST BIG POLITICAL POINTS AND ON THE GROUND OF HOW IT'S IMPLEMENTED AND NOT JUST THROW MONEY AND THE GOVERNMENT TAKES IT OVER BECAUSE THE GOVERNMENT DOESN'T HAVE A GOOD TRACK RECORD AT THE FEDERAL LEVEL OR AT THE STATE OF TAKING OVER AN INDUSTRY AND MAKING IT WORK EFFECTIVELY OR EFFICIENTLY, SO I'M SURE THEY WOULD WELCOME THE INPUT BUT IT'S GOT TO BE MORE THAN BIG TALKING POINTS.

IT'S GOT TO BE HOW DOES A PLAN WORK ON THE GROUND TO PROBABLY SUPPORT AND INCENTIVIZE CHILD CARRIES A FUNCTIONAL PART OF SOCIETY, NOT THE GOVERNMENT TAKING IT OVER BECAUSE IT HAS MONEY AND THINKS, WELL, WE SHOULD DO IT THIS WAY, WHICH GENERALLY COMES OUT WITH AN INEFFICIENT USE, BUT WE HAVE GOT TO GET -- SORRY.

ANDE REPRESENTATIVE RAYMOND AND I, WE GET ALONG WELL.

WE GET ALONG WELL AND I VALUE HER AND I VALUE HER OPINIONS.

VERY THOUGHTFUL, INSIGHTFUL.

BUT I HATE SOUNDBITES.

I HATE BULLET POINTS.

AND YOU HAVE GOT TO GET DOWN TO THE PLAN.

AND, QUITE FRANKLY, NO ONE HAS PRESENTED ME WITH A PLAN.

IS THE AND IF SOMEONE THOUGHT IT WAS SO IMPORTANT, I'VE BEEN IN THE HOUSE, I'VE BEEN THE CHAIR THIS LAST INTERIM, MY DOOR IS OPEN, COME IN AND TALK TO ME.

>> REPRESENTATIVE RAYMOND, ARE YOU GOING TO WORKING A PLAN THAT YOU CAN TALK TO CHAIRMAN PETRIE ABOUT?

>> I'D LOVE TO.

WE CAN LOOK AT WEST VIRGINIA IN TERMS OF A MIXED DELIVERY.

I HAVE COSPONSORED HOUSE BILL 238 WHICH IS EDUCATION CHAIRWOMAN REGINA HUFF'S BILL TO BRING EDUCATIONAL PRE-K TO FOUR-YEAR-OLDS ALL ACROSS KENTUCKY IT'S EVEN STRONGER THAN THE GOVERNOR'S PROPOSAL AND I THINK WE SHOULD LOOK THAT.

>> ANNE-TYLER MORGAN, I WANT TO ASK CHAIRMAN PETRIE THIS, TOO, IS THERE A PHILOSOPHICAL BELIEF THAT EARLY CHILDHOOD IS NOT AS EFFECTIVE AS SOME RESEARCH MAY SUGGEST THAT COULD BE TAINTED IN SOME WAY OR BENT TOWARD A POLITICAL IDEOLOGY THAT'S LIBERAL IN THINKING?

>> RENEE, I THINK THERE IS DIVISION AMONG LEGISLATORS INDIVIDUALLY ABOUT WHAT TYPE OF EARLY EDUCATION OR EARLY DEVELOPMENT WORK IS MOST BENEFICIAL TO CHILDREN, BUT I DO THINK THAT CHILD CARE, BY AND LARGE, OF SOME SORT AND THE NEED FOR CHILD CARE TO GROW THE WORKFORCE, TO SUSTAIN THE WORKFORCE THAT WE DO STILL HAVE IS NECESSARY ON SOME LEVEL, AND I THINK THIS IS SOMETHING THAT REALLY DOES GATHER A LOT OF MOMENTUM AS WE GO THROUGH THIS SESSION.

WE'RE STILL VERY EARLY IN THE LEGISLATIVE SESSION, AND AS REPRESENTATIVE PETRIE HAS POINTED OUT, THERE ARE PLANS THE IN WORKS TO DEVELOP A CHILD CARE BILL.

NOW, OF COURSE, THE APPROPRIATIONS MEASURES THAT ARE IPAD THROUGH THE HOUSE AND SENATE ARE NOT SIMPLY PASSED THROUGH THE BUDGET THAT HAS ALREADY PASSED THE HOUSE.

THEY'RE PASSED THROUGH MEASURES ALL THROUGHOUT THE SESSION, AND I THINK WE CAN EXPECT THAT SOME OF THESE BIPARTISAN MEASURES WILL CONTINUE TO SEE SUPPORT THROUGH THE SESSION REGARDLESS OF WHETHER EACH INDIVIDUAL AGREES COMPLETELY ON THE SUBSTANCE OF HOW EARLY EDUCATION SHOULD BE IMPLEMENTED.

>> AND ONE OF THE POINTS, JASON BAILEY, THAT I BELIEVE IT WAS REPRESENTATIVE WILLNER MADE WHO IS A CLINICAL PSYCHOLOGIST ABOUT SCHOOL SAFETY, YOU HAD SB1, AND DON'T ASK ME THE YEARS BECAUSE I DON'T EVEN KNOW WHAT YEAR IT IS NOW, BUT YOU HAD SB1 AND THEN A FOLLOW-UP AND STILL THAT SCHOOL SAFETY MEASURE HAS NOT BEEN ADEQUATELY FUNDED, SO THERE ARE THINGS THAT WERE PRIORITIES A COUPLE OF YEARS AGO BECAUSE OF TRAGIC INCIDENTS THAT THERE WAS A PLEDGE TO PUT MONEY BEHIND THAT'S STILL ABSENT.

>> YEAH, THERE'S THINGS WE COMMITTED TO, AND WE KNOW THAT THE MENTAL HEALTH PROBLEMS HAVE ONLY WORSENED FOR KIDS DURING COVID.

THERE ARE OTHER EXAMPLES OF THOSE.

WE COMMIT AS A STATE TO PAY FOR TRANSPORTATION.

THIS BUDGET DOES INCREASE THE AMOUNT BUT WE'RE $115 MILLION SHY OF FULFILLING THE STATE'S RESPONSIBILITY IN THIS BUDGET OF FUNDING TRANSPORTATION.

WHY WOULD WE DO THAT AND LEAVE $1.1 BILLION UNAPPROPRIATED?

THERE'S NO MONEY IN THE BUDGET FOR TEXTBOOKS.

ARE THERE IS NO INCREASE IN SCHOOL EXTENDED SERVICES WHICH WE ALSO KNOW IS VERY EFFECTIVE, AND AS MENTIONED THERE'S NOT ANYTHING MORE IN THEY'RE FOR PRESCHOOL OR CHILD CARE.

I HOPE WE FIND 911 IN THERE.

THOSE ARE EXPUNGEMENT EXAMPLES THAT WE AS A STATE HAVE TALKED ABOUT FOR A LONG TIME.

SO IT WOULDN'T BE THROWING MONEY AT THAT.

IT'S WOULD BE INVESTIGATING IN THINGS THAT WE HAVE ALREADY SAID AND COMMITTED WE ARE GOING TO DO.

I WOULD SAY THAT ANY VERSION OF THE BUDGET THAT'S BEEN YOU THE PUT OUT, THE GOVERNOR'S BUDGET, THE HOUSE BUDGET, PUTS ASIDE LOT OF MONEY 1.5 TO $1.7 BILLION IN THE RAINY DAY FUND, THE BUDGET RESERVE TRUST FUND, SO WE'RE NOT GOING TO BE THROWING ALL THIS MONEY OUT REGARDLESS OF ANY PLAN, BUT IT'S ABOUT THIS EXTRA THAT DID NOT COME BECAUSE OF A TAX INCREASE, SO, YOU KNOW, FOLKS ARE SAYING IT'S THE TAXPAYERS' MONEY.

THIS IS MONEY IS NOT BECAUSE OF A TAX INCREASE.

WE HAVEN'T HAD A TAX INCREASE.

WE HAD A TAX CUT.

IT CAME BECAUSE THE FEDERAL GOVERNMENT STEPPED IN, AS THEY SHOULD HAVE, AND HELPED PEOPLE, BUSINESSES AND THE ECONOMY, BY PROVIDING STIMULUS, AND IT CREATES THIS ONCE-IN A GENERATION OPPORTUNITY FOR STATES TO REINVEST AND IT'S GOING TO GO AWAY IF WE GIVE AWAY TAX CUTS WHICH AREN'T TARGETED.

THEY'RE SORT OF PUT OUT THERE, ESPECIALLY IF WE CUT INCOME TAX RATES.

>> AND ONE OF THE POINTS WE HAVE HEARD, THOUGH, IS THAT YOU DON'T PAY OUR RECURRING EXPENSES WITH ONE-TIME UTTERANCE FUNDS, SO IF YOU'RE TALKING WITH LONG-TERM STORMS MORE INVESTMENT IN THE CURRENT PROGRAMS AND SERVICES BUT YOU'RE USING THE MONEY THAT'S ONLY COMING FROM THE FEDERAL GOVERNMENT FOR THE NEXT TWO TO THREE YEARS, IS NOT IS THAT A BAD FISCAL POLICY?

>> THERE'S A COMBINATION OF ONE-TIME MONEY AND RECURRING MONEY IN THE BUDGET.

THERE'S A LOT OF RECURRING MONEY, AND NO FORECAST IS OUT THERE THAT SAYS THAT THE REVENUE IS GOING TO DECLINE OR THE ECONOMY IS GOING TO SHRINK.

WHAT THE FEDERAL GOVERNMENT HAS DONE BY STEPPING IN IS STIMULATE A FAST AND STRONG, ROBUST RECOVERY THAT EVERYONE EXPECTS TO CONTINUE.

SO WE CAN DO BOTH.

WE CAN DO SOME ONE-TIME THINGS, INFRASTRUCTURE, AND THEIR BUDGET.

THE HOUSE BUDGET HAS A LOT OF GOOD INFRASTRUCTURE PROJECTS IN IT.

WE CAN DO THOSE ONE-TIME THINGS, YOU THE ABOUT WE CAN START ON THE PATH OF THE RECURRING INVESTMENTS AS WELL THAT IT'S, AGAIN, SOME OF WHICH WE HAD THEM IN THE PAST, WE'VE JUST GOTTEN RID OF THEM THROUGH BUDGET CUTS.

WE NEED TO RESTORE THOSE, GET BACK ON TRACK, MAKE SOME ONCE IN A GENERATION OPPORTUNITIES.

>> SO REPRESENTATIVE PETRIE, WE'VE GOT SEVERAL QUESTIONS.

WE'LL TRY TO GET TO THEM, SO WE APPRECIATE OUR VIEWERS GIVING US THEIR FEEDBACK.

THIS PERSON FROM ELECTRICS WANTS TO KNOW THIS.

RATHER THAN THEN GOVERNMENTAL PROGRAMS, HOW DO YOU FEEL ABOUT PRIVATE BUSINESSES RECEIVING SOME OF THE ONE-TIME FUNDS THAT WOULD GIVE TO BUSINESSES TO HELP CHILD CARE WITHIN LEARNING JURISDICTIONS.

>> I'D BE CAREFUL WITH THE ONE-TIME MONEY AS THE CONVERSATION HAS BEEN GOING ALREADY.

I'D BE CAREFUL BECAUSE ONCE STEP INTO THE ARENA OF CHILD CARE ASSISTANCE, THAT'S SOMETHING THAT'S GOING TO BE FOREVER.

WHICHEVER WHENEVER YOU STEP IN, MUIR NOT COMING BACK OUT OF THAT SO MAKE SURE YOU'RE PLANNING FOR THOSE RECURRING EXPENSES.

I WOULD BE EXTRAORDINARILY CAREFUL.

AS FAR AS IF YOU CAN ALLOCATE MONEY ON THE RECURRING SIDE AND ACCOUNT FOR THAT GOING INTO THE FUTURE, SUPPORT BUILDING STRUCTURES AND SUPPORT FOR PRIVATE INDUSTRY TO DO THAT OR A PARTNERSHIP LOOSELY BETWEEN STATE GOVERNMENT, LOCAL GOVERNMENT FOR INCENTIVIZE THOSE THINGS SO THAT WE'VE GOT BETTER COVERAGE, BETTER OPPORTUNITIES TO UTILIZES THOUGH SERVICES, I THINK THAT'S A FAIR DISCUSSION.

THAT'S ACTUALLY A DISCUSSION THAT REPRESENTATIVE RAYMOND AND I HAD LAST WEEK I THINK IT WAS.

>> SO WE MIGHT SEE SOME MOVEMENT ON THAT.

>> I'LL ADD THAT THE STATE'S DIVISION OF CHILD CARE IS WISELY USING RESCUE PLAN FUNDS RIGHT NOW TO OFFER A $100,000 MATCHING GRANT TO EMPLOYERS TO OPEN A CHILD CARE CENTER.

GREAT OPPORTUNITY FOR OUR NEW FORD PLANT.

>> ABSOLUTELY.

THIS FROM SCOTT PORTER FROM LOUISVILLE.

AS FAR AS REVENUE GENERATING MEASURES, WHAT ARE THE PROETICS INSPECTS OF SPORT BETTING?

NOW THAT OHIO HAS PASSED IT EVERY SOUND RING STATES HAS PORTAL IS BETTING, CASINOS OR BOTH.

WE'RE TALKING ABOUT THE APPROPRIATIONS SIDE.

THE REVENUE IS ALSO PART COMMITTEE NAME.

REPRESENTATIVE PEET RYU, WHAT DO YOU THINK ABOUT MORE REVENUE GENERATING MEASURES NOT INFORMED NECESSARILY OF TAX HIKES BUT IN TERMS OF LOOKING AT THESE THINGS THAT OTHER STATES ARE DOING THAT'S REALLY KIND OF FLUFFING UP THEIR STATE COFFERS?

>> IT'S INTERESTING THAT WE HAVE CONVERSATIONS ABOUT GAS TAX HIKES, SPORTS BETTING.

THERE LAST EVER THERE'S WAY TO DO SOME OF THEM WITH MARIJUANA OR CANNABIS.

BUT WE'RE ALSO TALKING ABOUT A $1.1 BILLION IN UNAPPROPRIATED FUNDS AND $1.5 BILLION IN A BUDGET RESERVE TRUST FUND.

THE REVENUE SIDE OF THE EQUATION MAY NOT BE AS HIGH A PRIORITY THIS PARTICULAR SESSION AS NORMAL.

SPORTS BETTING IN PARTICULAR WHICH YOU ASKED ABOUT.

I HAVE HAD VERY FEW, LESS THAN THREE PEOPLE EVEN ASK ME ABOUT THAT WITH ANY SERIOUSNESS.

NOW, WE'LL SEE WHAT REPRESENTATIVE KOENIG IF HE HASN'T ALREADY FILED I ASSUME HE WILL BECAUSE HE CHAMPIONS THAT CALL AND ARE 23 IT COMES THROUGH WE WILL TAKE A LOOK AT IT HAD AND SEE.

>> DO YOU THINK THIS IS AN OPPORTUNITY?

IS THE POLITICAL TEMPERATURE RIGHT OR RIPE FOR SPORTS BETTING OR SOME TYPE OF EXPANDED GAMING?

I AM, YOU HAVE BOURBON.

YOU HAVE HORSES.

WE'RE ALREADY KIND OF IN THE ADVICE TERRITORY, WE VICE TERRITORY.

>> A LOT OF FOLKS HAVE MENTIONED WE'RE ALREADY SPORTS BETTING IN MANY WAYS, UNDER THE TABLE AND IN VARIOUS SCENARIOS, BUT I'LL ECHO AGAIN REPRESENTATIVE PETRIE THAT A LOT OF NIECE SMALLER REVENUE MEASURES ARE BEING DISCUSSED BUT REALLY IGNORING THE ELEPHANT IN THE ROOM, SO TO SPEAK, OF WHAT WE CAN REALLY DO TO GENERATE MORE INCOME FOR THIS STATE, AND IT IS PROBABLY MORE OF A WHOLESALE REFORM OF OUR TAX SYSTEM.

I THINK THAT ANY TIME WE TALK ABOUT THESE SMALLER REVENUE MEASURES, THEY WILL BE DEBATED ENDLESSLY BUT THE AMOUNT OF MONEY THAT THEY'LL ACTUALLY INGREDIENT COMMONWEALTH OF KENTUCKY MAY BE NEG IMAGE I WILL BE AT THE END OF THE ABOUT A.

THE WE HAVE A LOT OF MONEY RIGHT NOW, MANY, MANY KENTUCKIANS ARE STILL IN NEED.

WE HAVE A VERY SLOW-GROWING ECONOMY AND WE NEED TO FOCUS ON WHAT OVER THE LONG TERM CAN BRING IN MORE GROWTH TO THE STATE AND MORE ECONOMIC DEVELOPMENT TO REALLY SEE SOME CHANGE.

>> AND IN YOUR VIEW, TAX CUTS ARE ANSWER, SEE BUILDING ON THOSE 2018 EFFORTS, 2019.

I'M BAD WITH THE YEARS.

I'M SORRY FOLKS, I REALLY AM.

ARE BUILDING ON THOSE EFFORTS ALREADY DONE, DO YOU THINK THAT'S THE WAY TO GO?

CONSUMPTION-BASED TAX?

>> I WOULD SAY WE NEED TO LOOK AT OUR NEIGHBORS, AND THIS IS SPOKEN ABOUT A LOT, WHY PEOPLE MOVE TO 16 IN DROVES, THE WHY PEOPLE TO GO AUSTIN, TEXAS WHEN OUR COMMERCE LEXINGTON LEADERSHIP TRIP JUST INDIVIDUAL.

Y WE SEE UNPRECEDENTED GROWTH IN THOSE AREAS, AND THERE'S NO SECRET AS TO WHY.

IT'S LESS DEPENDS ON INCOME TAX WHICH IS MORE VOLATILE AND MORE FOCUSED ON CONSUMPTION-BASED TAX.

NOW, GRANTED, WE DO NOT HAVE TOURISM INDUSTRY OF TENNESSEE.

I'M NOT TRYING TO MAKE US TOO ANALOGOUS TO OUR NEIGHBOR TO THE SITH.

BUT I THINK IF YOU LOOK AT STATES LIKE NORTH CAROLINA, WHICH VERY CAREFULLY AND INCREMENTALLY SAW TAX REFORM AND TRIGGERED TAX REFORM BASED UPON CERTAIN APPROVE MEASURES BEING MET TO MAKE SURE THAT THEY DIDN'T LOSE MONEY FOR THE STATE, THAT'S WHEN WE NEED TO BE LOOKING FOR TO REALLY GUARANTEE LONG-TERM OUTCOMES FOR KENTUCKIANS.

>> RENEE, I WANT TO JUMP IN IF YOU DON'T MIND BECAUSE I WANT THAT BOXED THAT ISSUE JUST A LITTLE BIT.

WHEN PEOPLE TALK ABOUT TAX REFORM OR TAX MODERN SITUATION EVERYBODY UNDERSTAND WHY ARE WE DOING THAT?

SOME SAY BECAUSE YOU WANT TO BENEFIT CERTAIN CATEGORIES, YOU WANT TO HURT CERTAIN CATEGORIES ARE.

WE WANT GROWTH.

CAN I GO JUST A LITTLE BIT FURTHER?

AND I THINK THIS IS SOMETHING EVERYONE WOULD AGREE ON.

WHEN WE LOOK A KENTUCKY, WHAT DO YOU WANT KENTUCKY TO BE IN FIVE, TEN, 15 YEARS FROM NOW?

WE HAVE CERTAIN VISIONS OF INSTANT, SPECIFIC ISSUES WE'D LIKE TO SEE, BUT MOST EVERYBODY SAYS GOOD LONG-TERM SUSTAINABLE ORGANIC GROWTH.

THAT GIVES YOU THE REVENUES TO KEEP PUSHING OUT ON ISSUES.

THAT'S THE WAY TO KEEP BUILDING SERVICES OUT AND DOING IT IN A RESPONSIBLE AND SOLID WAY.

IN KENTUCKY I WOULD SUBMIT WE CANNOT HAVE THAT LONG-TERM SUSTAINABLE ORGANIC GROWTH THAT WE NEED UNTIL WE ADDRESS OUR POPULATION.

OUR POPULATION, AS FAR AS ECONOMIC FACTORS, IS A BIG DRIVER.

TAX BASE, ECONOMIC ACTIVITY IS GENERATED BY POPULATION NUMBERS.

WORKFORCE, WHICH WE ALL -- WHICH YOU HAD MULTIPLE SHOWS ON AND MULTIPLE SEGMENTS ON, NOT JUST THE PARTICIPATION BUT THE AVAILABILITY OF LABOR.

NOW, SINCE ABOUT '17 KENTUCKY HAS HAD GREAT ECONOMIC INVESTMENT, CONSISTENTLY EXCEPT FOR '20.

WE HAVE THAT COMPONENT MOVING, AND IT NEEDS TO CONTINUE TO MOVE, BUT WE HAVE TO FOCUS ON POPULATION GROWTH.

THAT MEANS COMING FROM OUTSIDE AS WELL AS INSIDE, AND THAT BRINGS ABOUT THAT SKILLED LABOR.

IF WE DO NOT HAVE THAT, WE WILL NOT GROW INTO THE FUTURE.

WE WILL CONTINUE OUR STAGNATION THAT WE HAVE HAD FOR 20 TO 30 YEARS WHILE OTHER STATES HAVE MOVED PAST US.

>> AND SO WHEN YOU TALK ABOUT FRAMING THE CONVERSATION AROUND TAX REFORM, IS IT MORE THAN JUST SOMETIMES THE BIFURCATED CONVERSATION OF WORKING FAMILIES VERSUS BIG BUSINESS?

SO WHAT WOULD TAX REFORM DO TO HELP THOSE WHO ARE LIVING PERHAPS AT THE BOTTOM OF THE WELL AND HELPING THEM ALSO ELEVATE?

>> WELL, LET'S JUST TAKE -- I DON'T WANT TO GET TOO FAR INTO IT BECAUSE THERE MAY BE SOMETHING COMING IN THE LEGISLATURE IN THE FUTURE, BUT JUST TO GIVE YOU BROAD STROKES.

WHEN YOU LOOK AT INCOME TAX OR CONSUMPTION TAX, AND YOU'VE GOT TO WORRY ABOUT PEOPLE THAT ARE ON FIXED INCOME FOR VARIOUS REASONS, BUT IF YOU THINK POPULATION GROWTH IN THAT WORKFORCE IS ESSENTIAL TO THE LONG-TERM WELL-BEING OF THE COMMONWEALTH, HOW DO YOU GET THAT?

RAISING A TAILS SALES TAX?

NO GIVING BENEFITS TO BUSINESSES?

NO.

DOESN'T GET TO THE WORKFORCE AND POPULATION.

CUT REAL ESTATE TAXES?

A LITTLE BIT.

BUT A LOT OF PEOPLE DON'T PAY THAT.

THEY COME IN AND RENT.

SO HOW DO YOU GET POPULATION MIGRATION?

PERSONAL INCOME TAX IS A BIG BARRIER, INVISIBLE BARRIER THAT WE HAVE TO OUR NEIGHBORS TO THE SOUTH.

YOU CAN SEE HOW OTHER STATES HAVE ATTRACTED POPULATION INFLOW BY WORKING ON THEIR PERSONAL INCOME TAX.

>> AND YOU MEAN ZEROING IT OUT.

>> I MEAN PERSONAL INCOME TAX IS A BARRIER AT WHATEVER NUMBER.

THERE HAVE BEEN SURVEYS I THINK EVEN BY THE CHIME BERE OVER THE INTERIM.

IT'S INTERESTING HOW PEOPLE SAY WE FLATTENED AT 6 AND REDUCED IT TO 5 ON PERSONAL INCOME TAX IN KENTUCKY.

THERE'S A LARGE SEGMENT THAT SAYS IF WE COULD MOVE TO 3% WE THINK THAT WOULD BE PRIME.

SOME TO 2%.

SOME TO ZERO.

TENNESSEE IS NOT OUR ONLY COMPETITOR.

IT'S JUST A MAJOR BORDER COMPETITOR.

PERSONALLY LIVING 50-SOMETHING MILES OFF THE SOUTHERN BORDER, ZERO IS SOMETHING THAT IT LOOKS LIKE WE NEED BUT I LEAVE THAT OPEN AS FAR AS A NUMBER.

>> BUT THE GENERAL FUND IS REALLY COMPRISED OF THOSE INCOME TAXES AND SALES TAXES, RIGHT?

>> INCOME TAX IS NEARLY HALF OF OUR REVENUE AND SO WE WOULD DEVASTATE, EVEN A SMALL CUT IN INCOME TAX IS VERY, VERY EXPENSIVE.

THE IF YOU WERE TO TUT YOU THE CUT AT A 10th A POINT, 10.

9, THAT'S MORE THAN WE SPEND ON PRESCHOOL.

WHO IS GOING TO CHANGE THEIR BEHAVIOR BASED A .1% INCOME TAX CUT?

BUT THAT'S HOW EXPENSIVE THESE THINGS ARE.

THE PROSPEROUS STATES ARE NOT CUTTING INCOME TAXES.

THERE ARE ABOUT A DOZEN STATES THAT HAVE INCREASED MILLIONAIRES TAXES SINCE 2000.

THERE ARE STATES THAT HAVE CLOSED CORPORATE TAX LOOPHOLES AND DEDUCTIONS AT THE TOP.

AND THOSE ARE THE STATES THAT ARE GROWING FASTER.

YOU LOOK AT THE -- THERE ARE NINE STATES WITH NO INCOME TAX.

THEY HAVE BEEN GROWING SLOWER THAN THE NINE STATES WITH THE ABSOLUTE HIGHEST INCOME TAX ON THE HOSPITAL WHEN IT COMES TO GDP GROWTH, IT WHEN IT COMES TO JOB GROWTH, ET CETERA.

SO WE'RE LOOKING AT THE WRONG STATES WHEN WE THINK THAT THAT'S THE PATH.

IF YOU LOOK AT THE STATES THAT HAVE CUT, LIKE OHIO, KANSAS, WISCONSIN, THEIR JOB GROWTH HAS BEEN SLOWER THAN THE NATIONAL AVERAGE IN THE PERIOD AFTER THEY CUT THAT.

NOW, WHY IS THAT?

IT'S BECAUSE INCOME TAX CUTS -- IN KENTUCKY IF WE CUT THE INCOME TAX RATE, TWO-THIRDS OF THAT GOES TO PEOPLE WHO MAKE MORE THAN $100,000 A YEAR.

THEY SAVE THAT MONEY.

THEY MAY BE OUT OF STATE.

IT DOES NOT FLOW BACK INTO THE ECONOMY.

BUT IF YOU TAKE THE $1.1 BILLION WE HAVE AND YOU INVEST IT IN OUR SCHOOLS, IN GIVING TEACHERS A RAISE, WHICH IS NOT IN THIS BUDGET, IN THE HOUSE BUDGET, IN SORT OF FUNDING OUR INFRASTRUCTURE, MAKING A GOOD QUALITY OF LIFE, IMPROVING OUR HEALTH CARE, OUR SCHOOLS, OUR INFRASTRUCTURE, THAT MONEY FLOWS, CIRCULATES THROUGH OUR ECONOMY, AND IT MAKES PEOPLE'S QUALITY OF LIFE BETTER, AND THEIR WELL-BEING.

THOSE ARE THE KEYS.

THAT'S THE FOUNDATION OF A STRONG ECONOMY.

TENNESSEE IS NEAR THE BOTTOM IN SCHOOL FUNDING.

IF WE THINK THAT IS A GOOD RECIPE FOR KENTUCKY, TO FOLLOW TENNESSEE NEAR THE BOTTOM OF SCHOOL FUNDING, I THINK WE'VE GOT A MISUNDERSTANDING.

>> SCHOOL FUNDING HAS NOTHING TO DO WITH TAXATION AND DON'T MISTICK GDP ALONG WITH POPULATION GROWTH AND THAT'S WHERE I'M COMING OF FROM.

YOU GO BACK TO THAT POPULATION GROWTH, THAT IS GOING TO BE THE KEY.

YOU LOOK AT OTHER STATES, KANSAS, BAD TIMING ISSUES.

BUT IN KENTUCKY JUST THINK ABOUT KENTUCKY AND FORGET ABOUT EVERY OTHER STATE FOR THE MOMENT.

WE'VE ALREADY HAD THIS.

WE'VE ALREADY TAKEN A STEP.

WE'VE ALREADY DeMINT 2018.

AND GUESS WHAT?

THE WORLD DIDN'T END.

GUESS WHAT?

ACTUALLY OUR NUMBERS GOT BETTER.

IT'S ALREADY A GOOD COUNTER EXAMPLE OF YOU CAN DO IT.

AND THE OTHER STATES, CERTAIN STATES DON'T HAVE TO CUT BECAUSE THEY'VE ALREADY CUT THEIR RATES.

BUT WORRY ABOUT GDP, LOOK AT THEIR POPULATION GROWTH.

IT'S HAPPENING.

PEOPLE ARE AFFIRMATIVELY MOVING THERE FOR THAT -- INDUSTRIOUS PEOPLE THAT WANT TO PRODUCE ARE MOVING THERE, BUT WE HAVE OUR OWN EXAM FELL IN KENTUCKY FROM '18 WHICH WAS VERY SUCCESSFUL.

>> SO I WANT TO GET THE BACK TIE COUPLE OF POINTS THAT JASON MADE AND ONE IS ABOUT THE TEACHER RAISES, THAT THEY ARE NOT IN THIS BUDGET, AND I WANT YOU TO EXPLAIN WHY BECAUSE YOU BELIEVE THAT LOCAL JURISDICTION SCHOOLING DISTRICTS SHOULD MAKE THAT DECISION, RIGHT?

>> TEACHER RAISES ARE IN THE BUDGET.

TEACHER RAISES BY DEFINITE PERCENTAGE ARE NOT.

>> OKAY.

ALL RIGHT.

>> IMPLICIT UNTIL THE ENTIRE STRUCTURE, IT IS SET UP FOR THAT PURPOSE ALONG WITH OTHERS SO THAT WE ARE PUSHING MONEY INTO PLACES WHERE LOCAL SCHOOL BOARDS ARE USING THEIR LOCAL MONEY, EVERYBODY.

WE'RE PUSHING IN GENERAL FUND MONEY TO LOOSEN UP -- >> HOW MUCH GENERAL FUND MONEY IS GOING TO THATR.

>> A ROUGH CALCULATION MAYBE $262 MILLION, AND I'D HAVETOLOGY BACK AND SEE IF SEEK IS MIXED INTO THAT ANOTHER ALL YOU, BUT IT'S A CONSIDERABLE AMOUNT OF MONEY BEING BURNED IN ON MULTIPLE FRONTS TO FREE UP DISCRETIONARY FUNDS AND SEEK IS BEING ADDED ON BECAUSE IT HAD DISCRETIONARY USES TO IT.

IN THIS LAST INTERIM, WHEN WE LOOKED AT TEACHER ISSUE, CERTIFIED, NON-CERTIFIED STAFF, BUS DRIVERS, CAFETERIA WORKERS, EVERYBODY, SOME JURISDICTIONS EVER GIVEN RAISES, PERCENTAGE RAISES OF VARYING NUMBERS, BONUSES, RETENTION BONUSES AND CREATIVE CONCEPTS -- I'M NOT EVEN SURE WHAT THEY ARE BUT IT'S TO MAKE SURE THEY DEAL WITH RECURRING EXPENSES -- 170-SOMETHING SCHOOL BOARDS DISTRICTS, THEY'VE ALL APPROACHED THOSE ISSUES DIFFERENTLY.

SOMETIMES THAT FRANKFORT KNOWS BEST APPROACH IS JUST NOT BEST.

YOU'VE GOT IN YOUR AREA IN JEFFERSON COUNTY AROUND MADISON AND ROCKCASTLE IF THAT AREA, TODD COUNTY, LOGAN COUNTY ARE OUR MARKETS ON TEACHERS ARE VASTLY DIFFERENT.

OUR MARKETS ON BUS DRIVERS ARE VASTLY DIFFERENT.

HOW FAR OF A REGION YOU DRAW YOUR WORKERS FROM IS VASTLY DIFFERENT THIS IS SOMETHING THAT NEEDS TO BE VERY MUCH BASED ON WHAT THE LOCAL CIRCUMSTANCES ARE AND THE BUDGET IS STRUCTURED TO LET THAT MONEY BE LOOSENED AT THE LOCAL LEVEL SO THEY ARE ABLE TO MAKE THAT SET OF DECISIONS AS WELL AS ENOUGH MONEY TO HIT A LOT OF OTHER PRIORITIES AT THE SAME TIME.

>> GO AHEAD, REPRESENTATIVE.

>> TEACHER RAISES ARE NOT IN THIS BUDGET.

THERE'S AN INCREASE IN SEEK FUNDING AND AN INCREASE IN SCHOOL TRANSPORTATION FUNDING AND IT FUNDS FULL-DAY KINDERGARTEN AND IT ENCOURAGES DISTRICTS TO PUT THAT MONEY TOWARD COMPENSATION RAISES.

THERE IS NO GUARANTEE OF TEACHER RAISES.

THIS ISN'T JUST ABOUT READERRING TEACHERS EVEN THOUGH THEY DIVERT.

I WATCHED TEACHERS TEACH MY SON IN KINDERGARTEN HOW TO READ ON THE COMPUTER.

I COULDN'T EVEN DO IT IN REAL LIFE.

THIS IS ABOUT SHORING UP OUR EDUCATION SYSTEM.

WE'RE SEEING RIGHT NOW STAFF SHORTAGES CLOSE SCHOOLS.

WE'RE SEEING IT NEWS OF COVID.

IF WE DON'T DO SOMETHING, YOU GO CLIMATE CURRICULUM BETTER COMPENSATING OUR TEACHERS, IN A COUPLE YEARS WE'RE GOING TO SEE STAFF SHORTAGES CLOSE SCHOOLS WHEN EVERYBODY'S HEALTHY.

>> SO THIS QUESTION FROM JERRY SHELTON CRAB ORCHARD, WHY ARE TEACHERS BEING OFFERED LOAN FORGIVENESS WHILE OTHERS ARE NOT?

WILL BUSINESSES ALSO BE GIVEN THE SAME LOAN FORGIVENESS?

>> I'M NOT SURE ABOUT THE QUESTION BECAUSE IN THE BUDGET WE'RE NOT DEALING WITH LOAN FORGIVENESS.

I THINK IN THE GOVERNOR'S PROPOSALS THERE WAS RECOMMENDATIONS, THERE WERE ONE OR TWO AREAS OF WORKERS COVERED BY THAT.

THAT'S SOMETHING WE'RE IN TALK WITH THE EXECUTIVE BRANCH.

THAT'S A TOPIC THAT WE TOOK UP IN THE INTERIM INTERNALLY IN TRYING TO PREP FOR THE BUDGET.

WE COULDN'T GET SUFFICIENT DETAILS ABOUT HOW TO DEVELOP A GOOD PLAN AT THIS POINT.

THE OTHER THING IS THIS: WE ARE IN AN EXTREME WORKER SHORTAGE AT THIS POINT.

LET'S JUST TAKE TEACHERS, FOR INSTANCE.

WE'VE HAD A SHORTAGE FOR A LONG PERIOD OF TIME.

IT'S JUST THAT THIS PARTICULAR COVID EVENT ELONGATED HAS EXACERBATED THAT.

WHEN WE COME OUT OF THE COVID EVENT, WE WILL STILL HAVE SHORTAGES WE'RE LOOKING AT.

IS THE MAGIC KEY A LOAN FORGIVENESS PROGRAM?

I KIND OF LIKE THEM BUT I'M NOTE SURE HOW THEY PLAYED OUT IN PRIOR YEARS AND PRIOR INSTANCES IN KENTUCKY AND OTHER STATES AND WHETHER IT STILL FITS TODAY.

ARE THE WORKERS THAT ARE GOING TO BE COMING THROUGH TEACHING CERTIFICATES, ARE THOSE NEW TEACHERS, WHAT ARE THEY LOOKING FOR?

IS IT THE LOAN FORGIVENESS?

ARE THEY LOOKING FOR HIRE WAGES?

ARE THEY LOOKING FOR BETTER WORK ENVIRONMENT OR REFLECT?

>> ALL OF THE ABOVE?

>> SHOULD WE HIT THOSE FACTORS 13 JUST HANGING OUR HAT ON ONE, AND I THINK IT'S A TOPIC WE HAVE TO LOOK AT.

WE'RE LOOKING AT IT ACTIVELY RIGHT NOW.

>> I THINK WE HAVE A CRISIS BECAUSE WE'RE NOT PAYING TEACHERS ENOUGH, NOT JUST TEACHERS BUT OTHER PUBLIC EMPLOYEES, NURSES WAS ANOTHER CATEGORY THAT WAS IN THE GOVERNOR'S BUDGET THAT INCLUDED LOAN FORGIVENESS.

WE'RE HAVING WORKFORCE PROBLEMS BECAUSE IN THOSE INDUSTRIES WHERE THE PAY AND THE WORKING CONDITIONS AND THE BENEFITS HAVE BEEN DEGRADED, AND THAT'S HAPPENED TO TEACHERS.

AND THE IDEA OF LOAN FORGIVENESS IS THAT A LOT OF THE TEACHERS GET IN THE FIRST FIVE YEARS WHERE THEY ARE NOT ABLE TO RETAIN THEM.

THEY GET BURNED ON IT.

THE TESTING IS CONSTANTLY CHANGING.

III ALL THESE PRESSURES.

THE THEY'RE MASK POLICE NOW.

THERE ARE SO MANY THINGS THEY HAVE TO DO.

SO IT'S REALLY SMART FOR US TO GET IN THAT.

THE PRIVATE SECTOR IS STARTING TO HAVE TO DO THAT.

THEY'RE STARTING TO HAVE TO RAISE WAGES AND RETHINK BENEFIT AND WORKING CONDITIONS BECAUSE THEY'RE NOT ABLE TO TRACK EMPLOYEES EITHER.

PEOPLE ARE RETIRING BECAUSE THEY DON'T WANT TO DIE FOR THEIR LOW WAGE JOB.

SO THE WORKFORCE IS SHRINKING AND WE HAVE TO DO THAT IN THE PUBLIC SECTOR, TOO, BUT WE HAVEN'T.

STATE EMPLOYEES HAVE NOT GOTTEN RAISES FOR TENT OF LAST 12 YEARS.

WE ARE DEGRADING THE GAULT QUALITY.

THE PENSION IS GONE.

NEW TEACHERS IN JANUARY CAME UNDER OUR NEW PENSION SYSTEM THAT IS NOT AS GOOD AS WHAT THEY HAD BEFORE, SO WHAT'S THE INCENTIVE TO STAY?

THIS IS PROBABLY, IN MY MIND, ONE OF THE MOST IMPORTANT THINGS WE HAVE TO DO.

WE LEARNED DURING THIS CRISIS WHEN WE DON'T INVEST IN WHAT SEEMS LIKE BORING EVERYDAY THINGS, LIKE TECHNOLOGY TO MANAGE YOUR UNEMPLOYMENT SYSTEM, WHAT HAPPENS WHEN YOU REALLY NEED THAT SYSTEM?

NOT JUST FOR THE PEOPLE WHO LOST THEIR JOBS BUT FOR THE WHOLE ECONOMY BECAUSE PEOPLE SPENT THOSE BENEFITS, IT'S WHAT KEPT US FROM FALLING INTO A DEPRESSION, BUT WE HAD A SYSTEM THAT WAS DECADE OLD BECAUSE WE JUST DIDN'T PUT MONEY IN IT.

>> YOU ARE YOU PUTTING MONEY IN IT NOW?

>> IT'S AN EXAMPLE OF WHEN YOU DON'T INVEST IN THOSE DAY-TO-DAY THINGS, MAKE YOU ARE SURE YOUR EMPLOYEES HAVE THE PAY SEQUENCE OF THE THEY NEED AND THE FLEXIBILITY AND WORKING CONDITIONS THEY NEED, MAKING SURE YOU HAVE MODERN TECHNOLOGY WE HAVE TO DO THAT AND WE JUST HAVEN'T.

>> ON ONE OF THOSE PARTICULAR ISSUES, I'M ENCOURAGED BY THE BROAD COVERAGE INCREMENTAL STEPS THAT WE'VE TALKING ABOUT.

THAT'S GOOD.

>> ANNE-TYLER MORGAN, THE WORKFORCE ISSUES.

PERHAPS THERE WILL BE LEGISLATION THAT COMES TO ADDRESS SOME OF THESE SHORTAGES IN THESE PARTICULAR INDUSTRIES.

WHAT DO YOU THINK WOULD DO IT?

MAYBE IT'S ALL OF THE THINGS CHAIRMAN PETRIE MENTIONED.

IT'S THE WAGES, IT'S THE BENEFITS, IT'S THE FLEXIBILITY, PARTICULARLY WITH GEN Z AND WHAT'S TO COME.

GO BACK TO THE FRONT OF THE ALPHABET MAYBE.

WHAT DO YOU THINK SHOULD BE CONSIDERED?

>> THANK YOU, RENEE, FOR THE QUESTION BECAUSE I DO THINK IT'S A VERY MULTI-FACETED PROBLEM THAT WILL REQUIRE A MULTI-FACETED APPROACH.

HAVE WE HAVE A CHANGING WORKFORCE RIGHT NOW NATIONALLY.

WE HAVE FOLKS WORKING REMOTELY THAT ARE ABLE TO MOVE FIGHTS CENTER EASILY.

THEY'RE LOOKING FOR STATES THAT INCENTIVIZE THEM TO DO SO, PLACES THAT THEY WANT TO LIVE.

THAT'S BEEN TALKED ABOUT ACROSS THE AISLE HERE.

AND, OF COURSE, WE HAVE DIFFERENT IDEAS INDIVIDUALLY ABOUT WHAT EXACTLY ATTRACT PEOPLE TO A CERTAIN LOCATION.

BUT I DO THINK WE'RE GOING TO REQUIRE NEW OPPORTUNITIES AND NEW INCENTIVES IN THE WAY OF ECONOMIC DEVELOPMENT FOR PEOPLE TO COME TO OUR STATE.

WE'RE SEEING SOME OF THAT.

OF COURSE, THE GOVERNOR HAS BROUGHT IN SO MANY KEY OPPORTUNITIES FOR PEOPLE TO COME WORK IN KENTUCKY, BUT I THINK ANYTHING WE CAN DO TO LOWER THE BURDEN ON, ESPECIALLY OUR SMALL BUSINESSES, ONE THING WE TALK ABOUT A LOT ARE THE LARGE BUSINESSES THAT, OF COURSE, CERTAIN PEOPLE WANT TO SEE TADD MORE AND CERTAIN PEOPLE WANT SEE TAXED LESS, BUT THE REALLY BREAD AND BITTER IS OUR SMALL BUSINESS OWNERS AND THEY HAVE REAL TROUBLE KEEPING UP WITH PAYING WORKERS A COMPETITIVE WAGE ON THE MARKET.

AS WELL AS PAYING OUR STATE WORKERS AS WELL AS THE PRIVATE INDUSTRY.

BUT MUCH OF THE PRIVATE INDUSTRY CAN'T BECAUSE IT'S MADE UP OF SMALL BUSINESS OWNERS WHO ARE STRUGGLING THEMSELVES IN THIS ECONOMY, SO I THINK WE HAVE TO LOOK A CREATIVE SOLUTIONS FOR THOSE EMPLOYERS.

THEY'RE NOT BIG CORPORATIONS TAKING ALL THE MONEY.

THEY'RE OUR NEIGHBORS WHO ARE PROVIDING JOBS TO MANY IN OUR COMMUNITIES.

>> SO LET ME GET BACK.

THERE WERE A COUPLE OF OTHER QUESTIONS.

THIS IS ABOUT CHAIRMAN PETRIE FROM WOLFE COUNTY.

WHAT ABOUT THE THE SECRETARY OF PERSONNEL NOT COMPLYING WITH YOUR REQUEST FOR A REPORT REGARDING STATE EMPLOYEE SALARY INCREASES?

HOW WILL YOU PROCEED?

WHY WOULD THE ADMINISTRATION NOT WANT TO HELP STATE EMPLOYEES?

>> I DON'T KNOW WHY THE RESPONSE WASN'T COMING, FORTHCOMING AS PROMISED.

JULY THE 7th WE HAD A BUDGET REVIEW SUBCOMMITTEE MEETING, THE SECRETARY AND COMMISSIONER TESTIFIED ABOUT THE PROBLEMS WITH PAY SCALE FOR STATE GOVERNMENT 18A EMPLOYEES, PROMISED TO HAVE RECOMMENDATIONS, A PLAN AND ANALYSIS DATA OUT BY SEPTEMBER THE 1st, AND I HAD ASKED FOR THAT MULTIPLE TIMES IN PUBLIC COMMITTEE MEETINGS AND RECEIVED NO RESPONSE.

I TALKED WITH THE GOVERNOR DIRECTLY ABOUT THAT.

I DON'T KNOW IF IT'S A DIFFICULT ISSUE.

I DON'T THINK IT'S THAT THEY DON'T CARE.

THERE MAY BE OTHER PRIORITIES THAT THEY HAD TO GET TO.

WE HAVE IN THE BUDGET SAID BY JULY 7th, WHICH WOULD BE THE ANNIVERSARY DATE OF THAT CONVERSATION, HAVE THE PLAN OUT OR THERE WILL BE A $2 MILLION PER-MONTH REDUCTION OF ADMINISTRATIVE APPROPRIATIONS.

BUT YOU KNOW I'M ENCOURAGED.

FRIDAY WE IPAD THE PASSED THE BUDGET BY THURSDAY.

BY FRIDAY AFTERNOON I RECEIVED CONTACT THROUGH MY LEGISLATIVE ASSISTANT THAT THE SECRETARY WAS WANTING TO SCHEDULE A MEETING WITH ME TO DISCUSS THAT FROM ISSUE, AND SO WE'VE RESPOND WITH DATES AND TIMES AND WE'RE WAITING TO HEAR BACK, AND I'M HOPING THAT WE'RE ABLE TO DISCUSS THAT AND MAKE PROGRESS VERY QUICKLY.

IT'S IMPORTANT.

I APPRECIATE THE QUESTION.

I DON'T WA TO POINT FINGERS.

I JUST WANT TO GET THE ISSUE DEALT WITH.

BUT THAT IS A CONTINUING PROBLEM THAT HAS TO BE DEALT WITH IF WE'RE GOING TO CONTINUE TO LOOK AT HOW DO YOU ADDRESS STATE GOVERNMENT PAY INTO THE FUTURE.

>> AND TO GET SOME OF THE BACKGROUND ON THAT, THERE'S A 6% FOR THE FIRST FISCAL YEAR BUT NOT FOR THE SECOND, AND YOU HAVE ASKED FOR THE PERSONNEL CABINET TO COME UP WITH THIS COMPENSATION SCALE, RIGHT?

>> TO ADJUST THE SCALES, CORRECT.

>> TO ADJUST THE SCALES.

SO DO -- E. YOU DO NOT KNOW PERHAPS WHERE THE SENATE LIES ON THAT.

SOMETIMES YOU START OFF AT 6%.

THEN STATE WORKERS ARE SKEPTICAL THAT THEY'RE GOING TO GET THAT AND THINKING MAYBE IT'S 3% IN ONE FISCAL YEAR, 3% IN THE OTHER.

DO YOU SEE THERE BEING A COMPROMISE PLACE THAT YOU WILL ACCOMPLISH THE WORKFORCE ISSUES AND THE RETENTION ISSUES AND ALSO STILL BE IN THE FISCAL CONSTRAINTS THAT YOU'D LIKE TO SEE?

>> I WISH I HAD THAT GOOD OF A KRILL BALL, AND I'M NOT FRYING TO BE COY ABOUT THE ISSUE BUT WE'VE WORKED THE HOUSE SIDE AND WE'VE WORKED IT TO THE BEST OF OUR ABILITY TO THIS PARTICULAR ISSUE AND OTHERS, WE'VE LAID OUT THE REASONING AND THE PROBLEMS AND OUR APPROACH, AND WE PUT IT INTO THE BILL AND WE PASSED IT AND IT'S IN WRITING AND PEOPLE CAN TALK ABOUT IT.

THE SENATE WILL DO WHAT THEY'RE GOING TO DO.

I THINK THEY'LL DO SOMETHING REASONABLE, RESPONSIBLE BUT IT PROBABLY WILL BE DIFFERENT THAN WHAT WE THOUGHT, AND THAT'S JUST ONE OF THE THINGS WE'LL HAVE TO HASH OUT.

I WISH I COULD GIVE YOU MORE THAN THAT, BUT TO DO SO WOULD BE MISLEADING I THINK AT BEST.

>> SO THIS QUESTION, REPRESENTATIVE PETRIE, YOU SPOKE TO POPULATION AND INCREASING KENTUCKY'S POPULATION.

HOW CAN YOU INCREASE POPULATION, ESPECIALLY IN EASTERN KENTUCKY, WHEN JOBS ARE GOING TO OTHER STATES ON OUR EASTERN BORDER?

WHEN IS THE LEGISLATURE GOING TO HELP EASTERN KENTUCKY WITH JOB GROWTH?

>> TOUGH PROBLEM ON EAST KENTUCKY AND TOUGH PROBLEM ON WEST KENTUCKY ALSO.

BOTH HAVE LOST SIGNIFICANT POPULATION FOR DIFFERENT REASONS, DIFFERENT ECONOMIES GOING ON.

THERE ARE VARIOUS PROJECTS GOING ON FROM THE EXECUTIVE BRANCH AS WELL AS THE GENERAL ASSEMBLY IN EAST KENTUCKY.

IT'S NOT AN ISSUE THAT'S BEEN MISSED.

YOU'VE GOT TOURISM.

YOU'VE GOT AG TECH TYPE ACTIVITIES.

WE'RE TRYING TO GROW POPULATION.

TRYING TO DO SITE DEVELOPMENT WAS PART OF THE PROCESS IN THIS BUDGET.

A LOT OF FROM EAST KENTUCKY AND FROM WEST FOR THE MOST PART, A LOT IN THE EAST ABOUT TRYING TO DEVELOP SITES SO YOU COULD ACTUALLY TRY TO ATTRACT BUSINESSES.

THE GOVERNOR HAD AN INTERESTING PROPOSAL.

I THINK AROUND $250 MILLION.

WE HAD PICKED UP ON IT IN PRESS RELEASE LAST FALL ON A PRODUCT DEVELOPMENT ISSUE IN THE ECONOMIC DEVELOPMENT CABINET, PUT IT AT 10 AND WE INCREASE -- $100 MILLION AND WE'RE GOING TO CONTINUE TALKING WITH THE EXECUTIVE BRANCH HOW TO DEFINE THAT.

DEVELOPMENT SITES, TOURISM, AG TECH.

IT'S GOING TO TAKE LARGE COMBINES, AND I DON'T MEAN TO BE DOWN ABOUT THIS, BUT EVERYONE KNOWS IT'S NOT GOING DO HAPPEN OVERNIGHT.

IT'S GOING TO TAKE CONCERTED EFFORT FROM MULTIPLE BE WITH MULTIPLE PERSPECTIVE TO GET IT DEALT WITH.

>> YOUR VERY FAMILIAR WITH THE WOES OF EASTERN KENTUCKY, AND SO TALK TO US ABOUT WHAT DO YOU THINK COULD HELP KIND OF BOOST EASTERN KENTUCKY?

>> WELL, YOU KNOW, THE ECONOMY IN EASTERN KENTUCKY NOW, THE LARGEST EMPLOYERS ARE THE SCHOOL SYSTEMS, THE HOSPITALS, THE HEALTH DEPARTMENTS, THE SORT OF PUBLIC INFRASTRUCTURE, AND, YOU KNOW, THAT CAN NEVER BE YOUR WHOLE ECONOMY, BUT EVEN IN BIG CITIES, PEOPLE TALKING ABOUT NASHVILLE.

NASHVILLE'S THE STATE CAPITOL.

IT HAS TENS OF THOUSANDS OF PUBLIC EMPLOYEES WHO ARE A NUCLEUS, AND THERE'S EMPLOYEES OF OTHER PUBLIC UNIVERSITIES THERE.

SO WHEN WE CUT THAT, LIKE WE'VE DONE, AND WE HAVE REDUCED MONEY, THE BEST ECONOMIC DEVELOPMENT PROJECT FOR EASTERN KENTUCKY IN RECENT YEARS HAS BEEN THE MEDICAID EXPANSION.

IT'S HIRED A BUNCH OF NURSES AND DOCTORS AND CLINICS AND DENTISTS IN THOSE COMMUNITIES AND ALSO HELPS MAKE PEOPLE HEALTHIER BY ALLOWING THEM TO GET TO GO TO THE DOCTOR.

THOSE ARE THE THINGS THAT YOU CAN THEN BUILD ON IN TERMS OF PRIVATE SECTOR WHEN YOU REVITALIZE DOWNTOWNS, MAKE THEM MORE ATTRACTIVE FOR TOURISM AND THINGS OF THAT NATURE.

SO YOU'VE GOT TO HAVE TO THAT CORE PUBLIC INVESTMENT.

WHEN WE CUT THE SEEK FORM OF LAW AND PUT $50 MILLION LESS THAN 16 YEARS AGO, THAT HURTS OUR POOREST COUNTY THE WORST AND THAT'S EASTERN KENTUCKY.

THAT TAKES THE MOST MONEY OUT OF EASTERN KENTUCKY.

SOETS THAT'S GOT TO BE STEP ONE.

THE MIGRATION THING IS A LITTLE BIT --S NOT AS IT PERTAINS TO EASTERN KENTUCKY BUT I THINK PEOPLE OVERESTIMATE HOW MUCH PEOPLE MOVE.

MIGRATION HAS BEEN DECLINING FOR DECADE.

THE PEOPLE WHO DO MOVE THE MOST TEND TO BE YOUNGER.

THEY'RE NOT LOOKING AT TAX RATES.

THEY ARE LOOKING FOR A GOOD QUALITY OF LIFE.

THEY'RE LOOKING FOR AMENITIES.

THEY'RE LOOKING FOR A SPECIFIC JOB.

AND OTHERS ARE MOVING TO BE CLOSE TO FAMILY OR BECAUSE OF CLIMATE CONSIDERATIONS.

TAXES ARE WAY DOWN, WAY, WAY DOWN THE LIST.

SO -- AND THERE'S ABOUT AS MANY PEOPLE WHO MOVE FROM TENNESSEE TO KENTUCKY AS MOVED FROM KENTUCKY TO TENNESSEE.

>> I THINK THAT CHAIRMAN PETRIE WANTS TO CHIME IN HERE BUT THIS COMMENT QUESTION FROM SOMEONE IN LOUISVILLE ON THE SUBJECTED OF ZERO INCOME TAX.

TENNESSEE TAXES FOOD EVERYONE AND I KNOW, THIS PERSON SAYS, THAT HAS LIVED IN TENNESSEE BEFORE AND AFTER THE ZERO INCOME TAX HAS TOLD ME THEIR PROPERTY TAXES HAVE DRAMATICALLY INCREASED OVER THE YEARS.

IN MY OPINION ZERO INCOME TAX JUST SHIFTS STATE TAXES HAD TO OTHER ITS PLACES.

>> THERE'S ALWAYS REVENUE, AND IT'S A QUESTION OF WHERE IT'S GOING TO COME FROM.

JUST BECAUSE TENNESSEE HAS DONE SOMETHING DOESN'T MEAN THAT WE WILL.

THE OTHER THING IS THIS.

UNDERSTAND THAT TENNESSEE, AS FAR AS I KNOW, HAS NEVER HAD A STATE INCOME TAX.

WE HAVE ALWAYS.

SO WE'RE DOING SOMETHING AND WE'RE GOING TO BE APPROACHING IT FROM AN ENTIRELY DIFFERENT WAY FROM TENNESSEE.

AND IN PARTICULAR ONE SMALL THING IS WHAT MENTION EARLIER THEY HAVE A TOURISM INDUSTRY THAT IS COMPLETELY DIFFERENT THAN HOURS, AND IF ANYONE THINKS WE'RE GOING TO GO TO ZERO THIS YEAR, NO.

YOU'RE TALKING ABOUT BETWEEN 4.6 AND $5 BILLION OF A 13 PLUS BILLION DOLLARS GENERAL FUND BUDGET ANNUALLY.

SO IT'S GOING TO BE REPLACED OVER TIME IF THAT ISSUE IS TAKEN UP.

I WILL GO BACK JUST A MOMENT ON THE POPULATION GROWTH.

I KNOW THE PEOPLE THAT I'VE TALKED TO, AND I'VE TALKED TO A LOT OF PEOPLE AS AN ATTORNEY FOR 23 YEARS ON DAY IN, DAY OUT, DOMESTIC, DIVORCE, JUVENILE, CRIMINAL, ESTATES ALL THAT KIND OF STUFF WITH YOUNG PEOPLE DON'T REALLY CARE ABOUT RETIREMENT.

YOUNG PEOPLE REALLY DON'T CARE ABOUT AMENITIES AS MUCH AS -- BECAUSE THEY CAN GET NIGH CAR AND GO SENATOR FOR AN AMENITY.

THEY WANT TO MAKE SURE WHEN THEY GET PAID FRIEND DOLLARS AN HOUR THEY WANT TO GET PAID 14ED AN HOUR.

THEY WILL CHANGE JOBS FOR A 50-CENT INCREASE.

>> REPRESENTATIVE RAYMOND, GAVE YOU THE LAST WORD FOR ABOUT 45 SECOND.

>> THE VISION I HEARD TONIGHT UNFORTUNATELY SAYS TO ME THAT WE'RE GOING TO LOWER RICH PEOPLE'S TAXES AND -- LOWER RICH PEOPLE'S TAXES AND RAISE POOR PEOPLE'S GROCERIES BUMS WANT TO LEAVE YOU WITH A QUOTE.

WHERE ARE WE GOING?

THE 21st CENTURY OR THE YOU ARE 22nd?

CENTURY.

A FRIEND OF MINE SAID IF WE SHOOT FOR THE MOON, WE ARE IN THE STARS.

WHAT IS IT?

ENGINEERING, JENN OM ICS.

THAT'S WHAT WE NEED TO DO WITH THIS MONEY.

WE NEED TO THINK BIG AND THINK BOLD.

STIVERS IS ON THE SENATE FLOOR IN MARCH 2021.

>> ANNE-TYLER, YOU'VE THE GUY PARTING WORD 20 SECOND.

>> GLUTE, RENEE.

WYE TALKED A LOT ABOUT WHAT'S BEING YOU THE CUT IN THE BUDGET BATE WANT TO TALK ABOUT WHAT WE HAVE CONSENSUS ON.

WE'VE SEEN SOME UNPRECEDENTED GROWTH IN THIS BUDGET, PARTICULARLY FORE SOME HEALTH CARE WORKERS THAT NEED IT MOST.

OF COURSE YOU KNOW THAT'S WHERE MY FOCUS IS, AND I WANT TO TALK VERY QUICKLY ABOUT YOU ARE INCREASES TO SOCIAL WORKERS WHICH WE'VE TALKED ABOUT FOR A ALONG TIME.

IN OUR WAIVERS WHICH HAVE SEEN UNPRECEDENTED RATES.

>> WE'RE GOING TO KEEP FOLLOWING IT.

WE'VE GOT 40 SOMETHING MORE DAYS, AND WE'RE RIGHT HERE WITH YOU ON THE RIDE.

ON "LEGISLATIVE UPDATE."

WE'LL RECAP WHAT HAPPENED IN THE STATE CAPITOL TODAY AT 11:00 P.M. EASTERN.

MY COLLEAGUE CASEY PARKER-BELL HAS THAT FOR YOU.

I'LL BE BACK IN FRANKFORT TOMORROW AND I'LL SEE YOU FOR MANY NIGHT 11:00 WELL.

AND THEN BE BACK HERE MONDAY NIGHT FOR "KENTUCKY TONIGHT," ANOTHER DISCUSSION YOU DON'T WANT TO MISS.