He warned lawmakers – who generally blanch at the prospect of raising any taxes – that projected revenue growth of about 3 percent is insufficient to cover one-time, stop-gap funding in the current budget and other built-in costs.
Like Lassiter the day before, Beshear said that while basic funding for public education was protected from cuts in the past five years, growing enrollment actually reduced per-pupil spending and at the same time other school programs were drastically cut.
He reminded lawmakers they reduced funding for higher education by $166 million since 2008 which has led to higher tuition, larger classes and fewer academic offerings.
Beshear recognized the need for pension reform, a major priority of the Republican Senate, and he agreed part of the problem has been the state’s failure to fully fund the system for years.
But Beshear said there was a good reason.
“I can tell you exactly why we haven’t fully funded the (annual required contribution or ARC),” Beshear said. “It would have required us to gut our most fundamental priorities: K-12 education, public safety and job creation.
“I refused to do it,” he continued. “And I refuse to do it in the years ahead. I will not allow our school children to be collateral damage.”
But he said the two issues – tax reform and pension reform – are tied and he and lawmakers must find consensus during the session “because we must find solutions this year” – again implying he is likely to call a special session on tax reform and perhaps link it to pension reform.
Democratic House Speaker Greg Stumbo generally endorsed the speech and Beshear’s emphasis on finding revenues to fund the state budget before taking on pension reform.
“I think we need to have an adult conversation,” Stumbo said. “You put your big boy pants on and talk about where the money will come from. Otherwise, it’s an unfunded mandate.” Stumbo has consistently called for a “dedicated funding source” for the pension fund.