Floyd County leaders are elated about some of the recommendations Gov. Andy Beshear proposed in the biennium budget Tuesday.

“Yes!” Wheelwright Mayor Don Hall said when he learned Beshear’s budget proposes to spend $22.2 million over two years to lease the prison in Wheelwright. “That’s wonderful. That’s going to get some people to work, ain’t it? It means everything, you know what I’m saying? It means everything to that little town. I’m so thankful for it. I’m extremely excited. I’m excited for the people that’s going get those jobs.”

He said he hopes the proposal makes it through the legislative process and is approved this year.

“I hope it flies,” he said.

The prison lease is one of several things in the budget proposed by Beshear that would benefit Floyd County.

Beshear also proposes the return of coal severance to coal-producing counties, teacher raises and funding for education that would improve county school districts. In his speech, he also mentioned completing the Mountain Parkway project.

Floyd County Judge-Executive Robbie Williams praised Beshear for this budget proposal.

“I would like to thank the governor for his commitment to Eastern Kentucky, and, in particular, to Floyd County, in following through with the promises that he made,” Williams said. “He’s a stand-up guy and I certainly believe he’s going to be a good for Eastern Kentucky and Floyd County.” Sen. Johnny Ray Turner, D-Prestonsburg, reported that Beshear also plans to fully fund the completion of the Ky. 680 project — something Floyd County officials have complained about for years. Rep. Ashley Tackett, D-Martin, reported that Beshear’s road plan also prioritizes other Floyd County road projects.

“It is a budget that not only ends years of painful cuts, it also makes a major investment in public education, fully funds expanded Medicaid, makes a historic investment in protecting our children, directs dollars to breaking cycles of poverty, and I believe will move us forward as a people,” Beshear told legislators Tuesday.

Turner called the budget proposal “fantastic.”

“I think it’s a fantastic budget for Eastern Kentucky. I think the governor proposed a fantastic budget for Eastern Kentucky ... I think he did a wonderful job trying to take care of us up in Eastern Kentucky,” Turner said.

Turner and Laferty have both met with Beshear and emphasized Eastern Kentucky priorities.

“It looks like he listened to us. I’m real pleased with that. You know, that didn’t happen in the last administration, and I’m just really pleased with Gov. Beshear, what he did for us,” Turner said.

Laferty reiterated his remarks.

“I was thrilled to see that Gov. Beshear’s proposed budget is pro-education, and just as importantly, pro-Eastern Kentucky,” she said in a statement. “The governor’s budget promises to protect education by fully funding state pensions, investing in secondary education at our colleges and universities, providing a raise for teachers, financing school safety, boosting per-pupil spending, and buying new textbooks. It also puts in motion a plan to help move Eastern Kentucky in the right direction through measures such as the return of coal severance tax dollars to our coal counties, like Floyd and Pike. This has never happened before, and could not come at a time more needed by our coal friendly communities.”

She explained that state officials toured Floyd County after Beshear came into office, and they discuss ways to improve safety in the region,

Turner said he and Laferty will work together to encourage legislators to approve the recommendations that Beshear proposed to help Eastern Kentucky.

“Ashley and I have been talking. We had a meeting today and we’re going work. She’s going to work in the House. I’m going to work in the Senate, to try to get them to leave what the governor proposed, we want to get them to leave it in,” Turner said. “They’re in the majority. They can change it. They can take it out like they did in 2016 and send it somewhere else, if they want to. But right now, it’s in the governor’s budget and we’re going to fight hard to keep it in there.”

Laferty also pledged to continue “being a vocal advocate” for the region and “fighting to maintain” Beshear’s proposals “because we need every single one to move our community and commonwealth ahead.”

Highlights of Beshear’s recommendations include the following:

Wheelwright prison

The budget proposed by Beshear calls for an increase in the total corrections budget by $109 million over the biennium and, if the budget is adopted, a portion of that increase will be used to open the prison in Wheelwright.

“To offset the loss of 1,269 prison beds, most at the medium-security Kentucky State Reformatory, the Commonwealth will begin operating a new medium-security Kentucky State Reformatory, the Commonwealth will begin operating a new medium-security correctional facility in Wheelwright, the Southeastern Correctional Complex, which provides 656 beds. This will help offset some portion of the lost beds at aging facilities that are also unable to recruit and retain sufficient correctional officers,” the budget says.

It allots nearly $383.7 million to adult correctional institutions in the state, and the prison in Wheelwright is listed as one of 12 state correctional facilities and one contracted facility for adult felon offenders.

It is described as a “leased medium security facility with an operational capacity of 656 inmates” located in Wheelwright.

The budget calls for spending more than $17.2 million in bond funds in the 2020-2021 fiscal year and $5 million in the 2021-2022 fiscal year for the Southeast Correctional Complex in Wheelwright.

Funding for the prison lease is among several things Williams mentioned as positive aspects of the budget proposal.

“I’m very excited about the prospects of the prison reopening. That’s a couple of hundred jobs for Floyd County that we desperately need,” Williams said.

Laferty and Turner ranked this project at the top of their Eastern Kentucky priorities this year, and they also each worked with the previous administration to open the prison in Wheelwright.

Amy Gilchrist, director of public affairs for Core Civic, the company that owns the prison, would not comment.

Coal severance

In addition to recommending funding to open the prison in Wheelwright, Beshear proposed bringing more coal severance funds back to coal counties.

The budget summary states, “For the first time since the inception of Kentucky’s coal severance tax, the Governor’s budget returns coal severance tax revenues to the counties, after reserving amounts needed for debt service on past capital projects that benefitted Kentucky’s coal counties and the administration of those programs.”

It estimates the return of $10.3 million in 2021 and $7.5 million in 2022 in coal severance to counties through the Local Government Economic Assistance Fund.

“That is big. That’s an excellent proposal,” Williams said. “I certainly think that helps us as a coal-producing county because we are going to have to transition our economy. We can use that money for industrial sites, for economic development, which is what I’m trying to do as judge-executive, is to take this coal severance money and use it for economic development. So, I’m excited about that as well.”

The loss of coal mining jobs over the past decade has increased calls from Eastern Kentucky leaders and legislators to bring more coal severance funds back to coal producing counties. Bills proposed in the legislature repeatedly have failed, however. Floyd County leaders say the funds are desperately needed.

In 2009, Floyd County received nearly $2.2 million in coal severance, the Kentucky Department for Local Government reports, and that amount dropped to a low of $392,449 in 2018. In 2019, the county received $406,000 in coal severance, but that number increased to more than $828,000 this fiscal year, following an announcement by former Gov. Matt Bevin in 2019 to provide Floyd County $600,000 in coal severance. The DLG reports the county received $626,000 last August.  

The Kentucky Energy and Environment Cabinet reported in the latest Kentucky Coal Report (spanning July through Sept. 2019), that coal production in Floyd County dropped by nearly 52 percent over the previous four months. At the time, there were 217 coal miners working in Floyd County, and 40 miners had lost jobs since the prior quarter.

The report shows that in Eastern Kentucky, coal production decreased from 67.2 million tons in 2010 to 17.1 million tons in 2018.

It shows coal production statewide also decreased from 104.6 million tons in 2010 to 39.8 million tons in 2018.

Williams said to offset the loss of jobs, he is exploring two sites for potential economic development in Floyd County, and plans to use coal severance funds for those types of projects instead of using them for operational funds.

“I was just reading an article this morning stating that in 2007 Eastern Kentucky produced over 100 million tons of coal in 2007, in 2020, they’re predicting 10 million tons. So, it’s down 90 percent,” Williams said. “So, the coal severance dollars are going to be huge because if we don’t start getting the industrial sites in place and deal with our economic issues, we’re going to see some rough roads ahead, as far as the economy goes.”

He said he doesn’t know how much in additional coal severance Floyd County will receive if the budget proposal is approved because coal production cannot be calculated at this time.

He said the county had three active coal mining sites, one in Ivel, one in Martin and one in Prestonsburg near the Carl D. Perkins Job Corps Center, but the company in Ivel closed two weeks ago, leaving two mines in operation in the county.

“It’s my understanding that these two companies are on solid footing through 2020, in speaking to the business owners,” Williams said.

Mountain Parkway, Ky. 680 and other road projects

Beshear’s listed the completion of the Mountain Parkway project as one of his priorities.

“So in this plan, I’ll be prioritizing two major projects, accelerating the Mountain Parkway in the east and building the I-69 bridge in the west,” Beshear told legislators. “These projects will open up commerce in rural Kentucky in a major way, and they will improve the quality of life for those people living in those regions.”

Citing the need to improve safety on rural roads, he said his administration will also add $100 million to improving rural roads.

Turner reported that the governor’s recommendations include funding for both the Mountain Parkway expansion and the design of its connection to Prestonsburg and the completion of an approximate two-mile stretch of the Ky. 680 connector that was not funded under Bevin.

“It fully funds $97 million, I believe, for the gap between Campton and Salyersville, that they haven’t started, they haven’t let yet,” Turner said about the Mountain Parkway. “There’s $97.3 million to complete the gap section on the Mountain Parkway and $3.2 million to begin the design phase of extending the Mountain Parkway to (Ky.) 114 in Prestonsburg. We can’t do anything until it’s designed and know where it’s going to go. That part hasn’t been done yet, so he put the money in there to do the design work on the Mountain Parkway extension to Prestonsburg.”

Turner reported Beshear also recommended spending $35 million to finish the Ky. 680 connector in Floyd County. Funding was previously allotted, officials explained last year, but was pulled under the Bevin administration. Floyd County officials say only two miles of the road needs to be funded for the road to be finished.

“Listen, if I can’t brag on this governor for doing what he did for Floyd County and Eastern Kentucky, I can’t brag on anybody,” Turner said. “It opens the Mountain Parkway. It’ll finish the Mountain Parkway and open it up for easier access for getting people out and, hopefully, it’ll bring industry in because it’ll take less time to get to Lexington and less time to get to Prestonsburg. So, it’ll expand the possibilities for Eastern Kentucky and Floyd County.”

Laferty reported that Beshear’s road plan works to improve safety and “build and drive economic development” in the region.

“Thankfully, the governor’s road plan funds the completion of the 680 Connector between Minnie and Harold in Floyd County,” her statement said. “The governor proposes fully funding this project during 2021, with construction in 2022.  Just as importantly, the governor’s road plan also expedites the design and completion of the Mountain Parkway expansion through Prestonsburg. The investment in these two road projects will help Eastern Kentucky attract business to the region by being able to offer safe roadways and time efficient travel comparable to other industry rich regions.”

She reported that Beshear moved other Floyd County road projects up on the list of priorities, including improvements in the access route to Betsy Layne High School on U.S. 23, the ramp from Ky. 80 to Ky. 7 and spot improvements on Ky. 979 between Branham’s Creek and John M. Stumbo Elementary.

“This project on Mud Creek addresses safety concerns on one of the most accident prone roadways in Floyd County, and by way of the SHIFT program, was the most heavily boosted project in our district,” she stated.

‘Education First’

Beshear touted his budget proposal as an “Education First” budget, and it contains droves of resources that would provide more funds for education in Floyd County and throughout the state.

That was good news to Angela Coleman, president of the Floyd County Education Association. Coleman has asked the Floyd County Board of Education for teacher raises at nearly every meeting for more than a year.

“I’m happy to see him keep his campaign promises, and I’m happy to see increases in education funding,” Coleman said. “The man’s heart is in the right place. He knows what’s important. He knows what will move Kentucky ahead, education. In the long run, the more we invest in education, the more comes out, at the other end.”

Coleman said she has seen education change lives for Floyd County students during her career as a teacher.

“I’ve seen students from many diverse backgrounds get a good education and get a good job and overcome many obstacles and challenges,” she said. “And education was the reason.”

Beshear recommended the following education-related appropriations:

•$2,000 salary increases for all full-time teachers in 2021, at a cost of $97.7 million in 2021 and $90.9 million in 2022. The funds, according to the budget, would be administered by the Kentucky Department of Education to school districts.

•Increasing the SEEK base per pupil by one percent, which would raise the base per pupil amount by $40 to $4,040. It is expected to cost $87.5 million over the biennium.

•Full funding of pensions for teacher retirements and medical benefits for retired teachers at a cost of $145.3 million over the biennium.

•An additional $5 million each year to support preschool programs in “disadvantaged areas.” The executive budget also includes provision to direct excess funds from SEEK and lottery revenues to preschool programs and all-day kindergarten.

•Restoring a teacher loan forgiveness program at a cost of $2.1 million, funded by lottery revenues.

• $18.2 million to finance school building upgrades required by the school safety bill, approved last year, as requested by the Kentucky School Boards Association.

•Increasing offers of assistance from the School Facilities Construction Commission to increase from $58 million last year to $100 million.

•Replacement of 150 school buses from the Volkswagen Settlement Fund and funding of textbooks.

•Increasing funding to colleges and universities by one percent, providing these institutions $200 million in bond funds for the Resurgence Fund, alloting “all of the estimated lottery revenues to student financial aid programs,” as well as $430 million in agency bond funds for universities. It also adds $18.7 million each year from the general fund to fund the “new frozen pension contribution rate” of 67.41 percent for regional universities and the Kentucky Community and Technical College System.

Dental hygiene

clinic

In the post-secondary education portion of the budget, $3 million is recommended to relocate the current dental hygiene/assisting clinic from Big Sandy Community and Technical College in Prestonsburg to the Mayo campus in Paintsville.

The note provided alongside the reference to these funds notes that the move is necessary to provide adequate space, updated equipment and to complete with federal guidelines.

The budget also provides $1.5 million in restricted funds to renovate the welding shop on the Mayo campus of BSCTC, noting that the shop is “outdated” and does not meet state and federal guidelines or electrical code guidelines.

Healthcare

•The proposed budget fully funds Medicaid and Medicaid expansion program, at a cost of $38.9 million in 2020 and $199 million in 2022. In 2018, the U.S. Congress phased out the 2015 enhanced match for the Children’s Health Insurance Program, or K-CHIP, causing the match to increase by 11.5 percent.

•The proposed budget provides $16.5 million each year for health departments and $13.1 million each year for mental health centers to fund employee pensions.

•Beshear proposes adding 350 new social workers, at a cost of $31.5 million over the biennium and $13 million over the biennium to preserve federal funding awarded for child support enforcement. He also recommends adding $1.8 million each year for pensions at child advocacy centers, domestic violence shelters and rape crisis centers, as well asl an additional $1 million for domestic violence programs.

State employees

•The budget calls for one percent salary increases for state employees, fully funding state pensions and giving “pension relief” for quasi-government agencies that provide health care, substance abuse treatment, mental health treatment and public safety services by providing $50 million each year to health departments, community health centers, regional universities and KCTCS, domestic violence shelters, child advocacy centers and rape crisis centers. The budget prohibits these agencies from ceasing participating in the state retirement system and it freezes the employer contribution rate at 67.41 percent, an increase from the current 49.47 percent. The pay raise will cost $32 million over the biennium.

Public safety

•Beshear proposes a $600 increase in stipends to police and firefighters provided through the Kentucky Law Enforcement and Firefighters Foundation Program, or KLEFFP.

•Beshear proposes salary increases for state police, as approved last biennium, as well as an additional 452.5 million for the second phase of the emergency radio replacement program, 43 million each year to improve state police labs and $2.5 million to help firefighters with post-traumatic stress disorder.

•The budget gives prosecutors an additional $3 million annually,

Other highlights

The proposed budget also would provide:

•$110.3 million over the biennium to fix water and wastewater infrastructure.

•Reimbursement, at the state rate, to counties for election and voter registration costs.

•$1 million each year for local governments to voluntarily provide “equal pay audits.”

•An additional $30 million for economic development investment programs.

•$4.1 million this year and $30 million in the biennium for Real ID to be administered through the Kentucky Transportation Cabinet, not the Circuit Court Clerks, as previously proposed.

•Funding that allow local governments to access federal grants for public transit and bus systems.

•Funding for loan forgiveness programs for nurses at veterans centers.

•$6.5 million to hire additional staff to improve collection of late tax payments.

•$22.7 million ($2.7 million this fiscal year) to improve parks.

•Reinstates funding for the Commission on Women at $357,500 each year.

•Provides an additional $200,000 each year for the Commission on Human Rights.

•Reinstates the Office of Minority Empowerment.

•Increases the state’s Rainy Day Fund from $306.1 million to $316.1 million.

New revenue

In his address to the legislature, Beshear urged leaders to raise revenues “without raising taxes on our working families.”

He recommended raising new revenues of $147.7 million, less than half of the $388 in new revenue proposed by Bevin.

The budget calls for raising taxes on cigarettes by 10 cents to $1.20 in taxes per pack and on chewing tobacco from 19 cents per unit to 38 cents per unit, effective July 1. It also proposes a 10 cent tax on e-cigarettes and vaping products. These taxes are budgeted to raise $50.3 million in 2020-2021 and $43.9 million the following year.

The budget also proposed raising $8.2 million over the biennium by raising the limited liability entity tax from $175 to $225 annually, effective Jan. 1.

Other revenues added to the budget include $37.1 million over the biennium in revenues from sports wagering.

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