LEGISLATIVE UPDATE  032309
                                                          FROM: GENE CAUSBY

Governor Purdue has promised tough decisions on the budget.  There are plenty of those in her budget proposal.

HIGHLIGHTS :

• Salary Recommendations: cut of 1400 state positions
• 0 increase I state employee salaries
• School employee salaries
• 1.8% increase in teacher salary schedules
• No bonus for those at the top of schedule.
• Eliminate the ABC bonuses
• 5% reduction in central offices
• No longevity for next 2 years
• Selected cuts in Education
• Bonus leave schedule changes

*   Salary Recommendations:
      *Cuts 1400 State employees positions.  Many of these are vacant, but not all.
      *0 increase in State employees salary.

*   School Employees:
      *Those paid on the teachers salary schedule...1.8% step increase (average).  Appropriates $64M.
      *No bonus for those at the top of the schedule.
      *Eliminates Longevity pay for the next 2 years.
      *Eliminates the ABC bonuses.
      *Central Office Personnel...5% reduction $64M
      *Non instructional Support Personnel 2.5% reduction...300 positions @ a cost of 10.3M

*   Bonus leave time for State employees and school employees NOT  paid on the teachers salary schedule:
            10-15 years...32 hours
            15-20 years...48 hours
            20-25 years...68 hours
            25+ years...94 hours

*   Selected other cuts in Education:

*   LEA Discretionary reduction $144M  It is expected much of this can be covered by the Federal Stimulus money.
*   Staff development   $62M
*   Student accountability  $38M
*   Testing   $2M
*   Textbooks   $37M
*   School resource officers   $1.2M
*   School bus replacement   $7.5M
*   School technology   $4M
*   More at Four   $1M
*   Smart Start   $8.9M

*   Selected Expansion Items:

*   Assessments and Accountability   $4.7M
*   Drop Out grants   $6.6M
*   Learn and Earn  $3.6M

The Budget the Governor proposes would also increase revenue by increased taxes as follows:

   *5% surcharge on alcohol sales
   *$1.00 increase on cigarettes
The two would produce a projected $507M increased revenue.

This is just the first step in the budget process.  The Governor's proposal now goes to the Senate.  They hope to have their version completed by the middle of April.  It then goes to the House for their version.  Eventually a Conference Committee will be appointed to resolve the differences.  It then will go back to the Governor for her to sign or veto.

On another matter, SB 287 "State Health Plan $/Good Health Initiatives" has been widely discussed.  It has been removed from the Senate calendar several times.  It is time sensitive.  The Director of the Health Plan has said there will be no money to pay claims after March 31st. if the $250M in this bill is not appropriated.  That $250M will keep the plan solvent until July 1.  The money would come from the Rainy Day Fund.

The rest of the bill would use a combination of allocations, increased premiums, increases  co-pays, and other benefit adjustments to cover the plan for the next two years.  It  also calls for smokers who haven't quit by July 1,2010 and those overweight July 1,2011 would be required to leave the 80-20 plan and go to the 70-30 plan.

Stay tuned,
Gene