Call to Order and Roll Call
The 4th meeting of the Interim Joint Committee on Appropriations and Revenue was held on Thursday, September 24, 2015, at 1:00 PM, in Room 149 of the Capitol Annex. Representative Rick Rand, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Christian McDaniel, Co-Chair; Representative Rick Rand, Co-Chair; Senators Ralph Alvarado, Danny Carroll, Chris Girdler, David P. Givens, Stan Humphries, Morgan McGarvey, Dennis Parrett, Wil Schroder, Brandon Smith, Robin L. Webb, and Stephen West; Representatives Denver Butler, John Carney, Larry Clark, Leslie Combs, Ron Crimm, Mike Denham, Bob M. DeWeese, Jeffery Donohue, Myron Dossett, Kelly Flood, Joni L. Jenkins, Martha Jane King, Reginald Meeks, Terry Mills, Tanya Pullin, Marie Rader, Sal Santoro, Arnold Simpson, Rita Smart, Fitz Steele, Wilson Stone, Tommy Turner, Susan Westrom, Addia Wuchner, and Jill York.
Guests: Tim Hazlette, President, Kentucky State Police Professional Association; Sherriff Berl Perdue, Jr., President, Kentucky State FOP and Sherriff, Clark County; Jerry Wagner, Executive Director, Kentucky Sheriffs’ Association; Joe Baer, President, Kentucky Professional Fire Fighters Association; Chief Michael Morgan, President, Kentucky Association of Fire Chiefs; Michael Curtsinger, Kentucky Fire Commission; Dr. Carl Rollins, Executive Director, Kentucky Higher Education Assistance Authority, David Lawhorn, KESPT Program Manager, Kentucky Higher Education Assistance Authority, Erin Klarer, Vice President, Government Relations, Kentucky Higher Education Assistance Authority; Jack Moreland, Southbank Partners; Thomas Fromme, City Administrator of Newport; Michael Giffen, City Administrator of Dayton.
LRC Staff: Pam Thomas, John Scott, Charlotte Quarles, Eric Kennedy, Jennifer Hays, and Jennifer Beeler.
Approval of Minutes
Senator Alvarado made a motion, seconded by Representative Stone, to approve the minutes of the August 27, 2015 meeting. The motion carried.
In memory of Kentucky State Trooper Joseph Ponder, the members observed a moment of silence to honor his service and dedication to the Commonwealth.
Trooper Compensation and Retention
Tim Hazlette, President, Kentucky State Police Professional Association (KSPPA) gave a brief overview of Kentucky State Trooper recruitment and retention challenges.
Mr. Hazlette said that KSPPA is an association formed for the purpose of advocating for troopers and dispatchers, and improving the welfare of current and former KSP personnel.
KSP is governed by KRS Chapter 16, which requires a biennial salary survey of the states bordering Kentucky. The last significant increase in trooper compensation was in 2006, when by executive order the Governor allowed KSP troopers to begin receiving a $3,100 stipend from the Kentucky Law Enforcement Foundation Program Fund (KLEFPF). The results of the most recent salary survey confirms that KSP troopers remain underpaid compared to surrounding states, particularly with regard to compensation in relation to years of service.
Mr. Hazlette noted that comparatively low starting salaries impact recruitment. As an example, the most recent cadet class was selected from approximately 600 applicants over a five month period. In contrast, 35 years ago, the number of applicants would have exceeded 4,000 for the same size class. Lack of adequate compensation also impacts retention. Because of stagnant pay during the past eight years, the ability to retain troopers is proving difficult. In many cases, as soon as troopers are retirement eligible, they leave to seek other employment to improve their financial status.
Mr. Hazlette requested that the General Assembly consider a 5 percent raise for all KSP personnel, and a $5,000 base pay increase for sworn Kentucky State Troopers of all ranks.
All members of the committee expressed their gratitude for the work of the troopers and all they do for the state of Kentucky.
In response to a question from Representative Clark, Mr. Hazlette stated that the 5 percent raise would apply to 1836 personnel, and the $5,000 base pay raise would apply to 878 sworn troopers and would equal approximately $15.1 million in total cost.
In response to a question from Senator Carroll, Mr. Hazlette explained that KSPPA has considered proposing incremental salary increases rather than the across the board raise proposed, but they view the current request as a first step and will propose incremental raises at a later date.
KLEFPF fund and the Firefighters Program Fund
Sherriff Berl Perdue, Jr., President, Kentucky State Fraternal Order of Police, gave an overview of the KLEFPF fund. Under KRS 136.392, all Kentuckians pays a 1.8 percent surcharge on their casualty insurance premiums. The proceeds from this surcharge are statutorily designated for the purposes of the Kentucky Firefighters Foundation Program Fund (KFFPF) and KLEFPF. The revenue generated is split between the two.
Sherriff Perdue described how amounts from the KLEFP fund are used to pay the annual proficiency incentive to officers who complete the annual mandatory training, to fund the Department of Criminal Justice Training (DOCJT) which administers training for most of Kentucky’s law enforcement officers; and to fund the Kentucky Law Enforcement Council, which manages the training standards and requirements statewide.
The Peace Officer Professional Standards program (POPS) was established in 1998 House Bill 455 to address a need for a standardized pre-hiring process and level of training across the Commonwealth for all law enforcement officers. Kentucky’s DOCJT was the first nationally accredited public safety training program. The standards established by POPS have resulted in Kentucky’s law enforcement officers being among the best trained in the nation with a minimum of 888 hours for basic training and 40 hours a year of continued proficiency training. KLEFPF is the only funding mechanism for police standards and training.
KLEFPF started as an incentive program to encourage training before training became mandatory under POPS. The stipend has since evolved into pay incentive for all officers who meet the high standards set forth through POPS. In 1998, the incentive was set at $3,000 per year. The incentive was increased slightly to $3,100 in 2001.
Sherriff Perdue noted that the stipend has remained the same since 2001 even though the total amount in the fund has increased 410 percent from 2001, when the fund total was $14.3 million to $58.7 million in FY 2012-2013. According to the Bureau of Labor Statistics, the proficiency pay would need to be $4,177 in today’s dollars to equal the value of the $3,100 in 2001 due to inflation and cost of living increases.
Sheriff Perdue stated that law enforcement officers from across the state and in all communities are held to the same high standards regardless of their pay. That means that the officer who works in one of the twelve lowest paid departments whose average starting salary is $17,511 is expected to perform at the same level as an officer in one of the top paid departments whose starting annual salary is $44,141. The DOCJT 2015 compensation study reported the average starting annual salary across all of Kentucky’s law enforcement agencies at $28,727.
The groups of law enforcement officers who do not receive KLEFPF proficiency pay are Fish and Wildlife officers, Agriculture Officers, Charitable gaming officers, Parks officers, Alcoholic Beverage Control Officers, Insurance Fraud officers, Attorney General investigators, and School Resource officers.
FOP goals for the 2016 legislative session are to advocate for an increase in the KLEFPF annual proficiency pay to at least $4,000 in order to return the value lost over a decade of cost of living increases, and to ensure that all full time law enforcement officers who meet the POPS level of professional training receive the annual proficiency pay.
In response to a question from Chairman Rand, Sherriff Perdue stated that when a law enforcement officer attends a POPS training, it is paid for through the KLEFPF fund.
In response to a question from Representative Butler, Sherriff Perdue explained that the information that they are working from currently was discussed during a legislative work group at the end of last session.
In response to a question from Chairman McDaniel, Joe Baer, President, Kentucky Professional Firefighters Association, stated that for firefighters, there are two programs that are administered out of the firefighters foundation fund, first is the training incentive which is $3,100 and goes to approximately 3,600 paid professional firefighters, and the second is state aid that goes to approximately 800 volunteer fire departments in the amount of $8,250 annually.
In response to a question from Chairman McDaniel, Mr. Baer stated that the proposal from the firefighters will be to increase the training incentive pay to $4,000 and the amount to volunteer departments to $10,000 annually.
In response to a question from Representative Stone, Sherriff Perdue explained that there are 339 officers that are not currently included in KLEFPF.
In response to a question from Representative Jenkins, Mr. Baer stated that, as it currently stands, the proficiency pay does not extend to EMS service workers, just firefighters, some of whom are cross trained as EMT or paramedics.
In response to a question from Representative Denham, Sherriff Perdue explained that volunteer fire departments get funds from the firefighters foundation fund as well, and the request is to raise their funding from the $8,250 annually to $10,000 annually.
In response to a question from Representative Denham, Michael Curtsinger, Kentucky Fire Commission, explained that cost of the proposed increases for firefighters would be approximately $4.7 million.
Incentives for Saving for College and Kentucky Education Savings Plan
Dr. Carl Rollins, Executive Director, Kentucky Higher Education Assistance Authority (KHEAA), discussed the Kentucky Education Savings Plan Trust, which is one of the 529 plans.
Dr. Rollins explained that the plan is to help families save for future higher education expenses of their children. This plan is administered by the KHEAA and the funds are managed by TIAA-CREF tuition financing. There are currently 15,400 active accounts totaling $180 million, and the average account size is approximately $11,700.
Dr. Rollins gave a brief overview of the history of the 529 plan. Several surrounding states offer some form of tax incentive to encourage savings for college through these plans. He noted that, for these savings plans, Kentucky is one of eight states that has an income tax and that does not provide some type of tax incentive to residents.
Dr. Rollins discussed KHEAA’s legislative proposal. The primary goal of legislation is to encourage Kentuckians to save for college using the state-sponsored 529 program. The proposed legislation would allow Kentucky residents to deduct up to $5,000 per year by an individual taxpayer and up to $10,000 for married couples filing jointly from their state income taxes for amounts deposited in a 529 account.
In response to a question from Representative Pullin, Dr. Rollins stated that grandparents can open accounts for their grandchildren.
In response to a question from Representative Smart, David Lawhorn, KHEAA stated that part of the management agreement with TIAA-CREF allocates a marketing budget each year that KHEAA oversees and utilizes to promote the program.
In response to a question from Representative Carney, Dr. Rollins stated that most school districts and local libraries are very helpful in promoting these products.
Developments in Northern Kentucky
Jack Moreland, Southbank Partners, Inc., Thomas Fromme, City Administrator of Newport and Michael Giffen, City Administrator of Dayton, gave an overview of developments and construction projects in Northern Kentucky.
Other Business
The chair informed members that various documents were available in their folders for review, including a list of executive branch agency reports that had been submitted to the committee.
There being no further business, the meeting was adjourned at 2:45.