The widely reported attempts to pass a continuation budget in the last hours would have effectively prevented many of the savings the Kentucky Chamber advocated from being enacted. In fact, in the waning hours of the session, the House passed a continuation budget as a largely symbolic gesture, which would have backed away from some of the negotiated spending reductions in public employee health costs.  By the time this had passed, the Senate had already adjourned their Chamber, with Senate leaders indicating that a continuation budget would spend too much in the first year of the budget requiring drastic cuts in the second year.

Both the House and Senate budgets previously passed by their respective Chambers included substantial savings in the areas of public health benefits, Medicaid savings and some efforts to reduce corrections costs – all budgetary items identified by the Chamber’s Leaky Bucket report.  In the end, both budgets were very close, but the House wanted to fund a number of construction projects by issuing bonds.  Senate members argued that, in these tough times, the state could not afford to go any further into debt.

As we approach a special session within the next six weeks, we will need to continue to push for cost savings to prevent additional efforts to increase the tax burden on employers.  Thanks in large part to a number of Chamber members contacting their legislators, we were able to stop many pieces of negative legislation this session.  Below is an updated list of bills we were watching as the 2010 General Assembly came to a close.

	Unemployment Insurance – HB 349 (Clark) was a comprehensive reform of Kentucky’s UI system.  This Kentucky-sponsored solution would have lowered the overall tax burden for Kentucky employers and allowed for lower future tax rates when the fund's debt was retired.  This legislation passed the House, but failed to receive a vote in the Senate.  The Chamber will continue to push for comprehensive reforms to address the high costs this system imposes on employers.
	Charter Schools – HB 109 (Belcher) as amended by the Senate, would include the original provision to require early education assessment and intervention for treatment for learning disabilities but also added a provision to allow charter schools in the state with local board authorization. This provision will improve the state’s application for the second round of federal Race to the Top funds. Also included in the bill are SB 67 (Winters) which would promote early graduation for high school students who fulfill rigorous academic requirements and SB 94 (McGaha) which encourages the establishment of summer learning camps with the goal of closing the achievement gap between students of different socioeconomic backgrounds. The House failed to act on this legislation.
	Wellness Program Protections – HB 165 would allow employers to manage health care costs by rewarding employees with a discounted premium on health care plans and exempt wellness plans with smoking cessation programs from discrimination statutes. The governor signed this Chamber-supported legislation into law.
	Retiree Health Insurance – HB 540 (Rollins) would save the state’s taxpayers by requiring retired teachers under age 65 to take on part of the financial responsibility for their health insurance. This positive legislation is a responsible step toward shoring up the teachers’ retirement fund, from where legislators have been borrowing dollars to pay for retirees' insurance. This legislation was signed into law by the governor earlier this week.
	Alternative Fuels – HB 589 (Adkins) includes liquefied fuel and liquefied petroleum derived from natural gas or natural gas liquids in the definition of alternative transportation fuels after August 1, 2010.  After the effective date, HB 589 authorizes up to five newly constructed or retro-fitted alternative fuel facilities that use natural gas or natural gas liquids as their primary feedstock to receive tax credits created under HB 1 from the 2007 session.  This legislation was signed into law by the governor earlier this week.
	Pensions – HB 146 requires two of the three members of the Kentucky Retirement System's board of trustees to have at least ten years of investment experience. This chamber-supported legislation became law.
	Transfer of Credits – HB 160 (Rollins) requires the Council on Postsecondary Education to develop statewide transfer procedures for college credits and align lower division coursework across postsecondary education institutions. This Chamber-supported bill was signed by the governor this week.
	Dropout Age – HB 301 (Greer) would raise the compulsory school attendance age to 18 by 2016. Amended by the Senate Education Committee this week, the bill also includes SB 28 (Westwood), the Career Pathways Act, providing a career-based program of study for high school students. The Senate failed to act on this legislation.