2017-18 KY HS Students’ Dual College Credit Courses Rise 45 Percent Since 2015-16 Year

The Kentucky General Assembly capped off the 2018 legislative session with numerous measures that will affect postsecondary education. Unless otherwise noted, the following will go into effect July 14.

• Pension Reform
  SB 151 makes changes aimed at stabilizing public pension systems that face more than $40 billion in unfunded liabilities. Changes proposed by the pension reform legislation include placing future teachers in a hybrid “cash balance” plan rather than a traditional benefits plan, and limits the impact of accrued sick leave on retirement benefit calculations.Attorney General Andy Beshear has filed suit against the action, which could affect implementation of the legislation. If found legally binding, some provisions of the law take effect July 14, while others will not take effect until Jan. 1. For more information about the court action, visit https://ag.ky.gov/pensionbill.
• Required Money-Management Courses
  HB 132 requires Kentucky high school students to pass a financial literacy course before graduating.
• Tax Reform to Boost Revenue
  HB 366 generates about $400 million in additional revenue over the next two years. The plan includes:
  • A cigarette tax increase of 50 cents per pack.
  • Expansion of the state sales tax to some services, such as landscaping, janitorial, laundry and small-animal veterinary services.
  • A flat five-percent tax for personal and corporate income taxes in Kentucky.
  • A phase-out of the inventory tax will occur over a four-year period.
  • Restricting itemized deductions to Social Security income, mortgage income and charitable giving. It would also disallow the deductions for such things as medical costs, taxes paid, interest expenses on investments, and casualty and theft losses.
  • Removal of the $10 state personal income tax credit.
• Changes to Campus/CPE Operations
  HB 592 is the “statutory relief bill” that addresses a number of items which, when implemented, should be significant cost-saving actions at the campus level.  Due to the inclusion of an “emergency clause,” this bill went into effect immediately upon the Governor’s signature April 26.  The provisions enacted in this legislation:
  • Allows video teleconferencing for public meetings, where individuals can see and hear each other, when a primary location is noticed and the public can attend to see and hear all members.  Currently, the meeting must be noticed in all locations where a member is located.  It also permits closed session via video teleconference.
  • Allows interests in real property to be sold at fair market value rather than appraised value.
  • Frees a public college or university to renegotiate the cost of a lease at renewal.
  • Affords institutions the ability to cancel a lease upon “at least” 30 days written notice, rather than “within 30 days.”
  • Requires bidder security bonds for projects initiated by public colleges and universities exceeding $1,000,000 rather than $40,000.
  • Allows a public college or university to improve leased property costing in excess of $10,000 but less than $1,000,000 in a lump sum upon approval of its board as long as it is financed from non-general fund appropriations and does not incur debt.  Currently, amortization must occur for improvements more than $10,000 over the life of the lease.
  • Allows for authorization of a public college or university capital project without inclusion in the budget bill if funding is solely by non-general fund appropriations and approved by the Capital Projects and Bond Oversight Committee. Currently, only projects that are funded 50 percent by private or federal sources are exempt from budget bill authorization.
  • Allows an institution to opt out of the state fire and tornado fund if they can obtain commensurate coverage elsewhere.
  • Increases the threshold for reporting leases to the Capital Projects and Bond Oversight Committee from $100,000 to $200,000.
  • Eliminates the faculty and staff tuition waiver requirement, allowing institutions to determine how, or if, they provide tuition assistance to employees.  Retains the tuition waiver program for area technology employees’ taking six hours per semester, but changes the waiver to “last dollar” in order to capture any available federal or state grant aid.
• Change in Campus Crime Reporting
  SB 130 was one of the “statutory relief” items that conforms the crime reporting requirements of Kentucky’s Michael Minger Act to the federal Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act.
• 2018-20 Biennial Budget For Public Postsecondary Institutions
  Highlights include:
  • An across-the-board 6.25 percent cut to postsecondary institution operating funds ($54.3 million).
  • Restored funding to many specific programs at the postsecondary institutions previously identified for cuts or elimination in the Governor’s proposed budget.
  • No funding to address anticipated KERS cost increases at the comprehensive universities and KCTCS institutions between 2017-18 and 2018-19, expected to total $47.2 million.
  • A freeze for the KERS employer paid contribution rate at the 2017-18 level (49.47%).
  • A recurring appropriation of $31.0 million to the Postsecondary Education Performance Fund (PEPF) each year of the biennium, plus an additional $7.7 million appropriation in the second year of the biennium (2019-20).
  • No state bond funds or debt service appropriated for asset preservation and renovation projects at the campuses.
  • $20.0 million in state bond funds each year of the biennium, or $40.0 million in total, for a University of Kentucky, HealthCare Disparities Initiative.