Kentucky Sen. Chris McDaniel (R-Ryland Heights), whose district includes much of Kenton County and is chairman of the Senate Appropriations and Revenue Committee, said Saturday , spoke at the Kenton County Mayors Group at Lakeside Park, where he discussed not only the consequences of the policy. He mentioned issues he would like to focus on not only in the most recent legislative session, but in the future.
McDaniel began by talking about his career working on the state budget and reviewing some of the spending that came out of this year's legislative session. McDaniel said this year was the first time in a while that Congress was able to focus on investments without worrying about unpredictable situations like the coronavirus.
“This is the first budget session where we haven't had to deal with a real social emergency due to COVID-19, nor have we had to deal with a really bad fiscal situation,” McDaniel said. “And the conservative nature of what we've been doing, the way we save, the way we don't spend, has led us to a point where we can make some pretty huge investments.”
McDaniel discussed several major projects from the session, most notably the move to Covington's new Center of Biomedical Excellence, which will relocate NKU's Chase School of Law and the University of Kentucky School of Medicine branch to Covington. It is funding. Appropriation of $400 million to the road fund (for a summary of what was passed in Frankfort this year, read LINK nky's summary of the 2024 session).
Toward the end of his first statement, McDaniel said the state's new fiscal stability could soon allow for income tax cuts, barring unforeseen circumstances.
“Next month, barring anything unusual, I expect conditions will be in place to vote to lower the income tax rate to 3.5%,” McDaniel said.
Such a vote would take place in January 2025, with the tax rate set to begin in 2026. The current income tax rate for individual residents in Kentucky is 4.5%.
Kenton County Judge and Executive Chris Nockleman, like many in attendance, thanked McDaniel for his efforts and called this year's spending an “unprecedented investment in Northern Kentucky.”
Mr. Knochelman then asked Mr. McDaniel what he hoped to accomplish for Kentucky in the future, which led to a discussion about the future of the region and issues on the minds of those in attendance.
At the top of McDaniel's list was cybersecurity issues. From his perspective, there wasn't a lot of enthusiasm for the issue among Kentucky and national leadership.
“I continue to believe that there is a gross neglect of cybersecurity thinking nationally,” McDaniel said. “This is not unique to Northern Kentucky or Kentucky.”
He worried that it would take some kind of large-scale cybersecurity attack on critical infrastructure, a “9/11 moment,'' before leaders could respond.
“I think something will happen at some point that will make us realize how far behind we really are,” McDaniel said.
McDaniel also argued that economic conditions across the state east of I-75 continue to deteriorate, which is having a local impact. Specifically, he was concerned about how it would affect the state's education funding obligations, since allocations to school districts are determined (in part) by local real estate assessments. However, because the funding all comes from the same pot, an increase in state funding for one district will necessarily result in a decrease for other districts to get the math right. He argued that increasing overall economic prosperity would reduce regional tensions.
“We're going to continue to maintain our constitutional obligation to common education, so what can we do to kind of ramp it up?” McDaniel asked rhetorically.
Regarding the potential income tax cut, Edgewood Mayor John Link asked, “How are we going to make up the difference in losses within the state?”
McDaniel said given the state's current economic growth, no additional measures are likely needed.
“At 3.5%, there's no concern that we'll have to do anything else,” McDaniel said.
Lakeside Park Mayor Paul Markgraf expressed concern that the poor condition of Kentucky's state parks could affect the local tourism industry.
“We have people coming to do the Bourbon Trail, we have people coming for all of the new construction projects and manufacturing facilities,” Markgraf said. “We'd like to see recreation dollars spent here as well. Unless we get some upgrades there, I think they might head to Florida when there aren't hurricanes.”
McDaniel said it's difficult to garner interest in creating public-private partnerships to improve state parks.
“The park doesn't have the cash flow to justify the investment,” McDaniel said.
Still, he said the state spent hundreds of millions of dollars on state parks last year, though he declined to give an exact figure. The process to release the money stalled in the planning stages, but Congress was able to release the money this year.
“We released the balance of the fund to state parks to make a lot of much-needed renovations,” McDaniel said.
Knochelman wanted to know about road projects in the county.
McDaniel has a much harder time defending the region's transit agencies today due to the loss of former state Rep. Sal Santoro, R-S.C., who chaired the House Transportation Budget Review Subcommittee. He said that he has justified it by saying a lot of things. Members of Kenton County's local leadership had a good relationship with Secretary Jim Gray, who currently heads the Kentucky Transportation Cabinet.
At the end of his statement, Mr. McDaniel encouraged attendees to contact him with any future questions or requests.
“We are very grateful for our partnership,” McDaniel said.
The next Kenton County Mayors Group meeting will be held on Saturday, June 15th at 9 a.m. at the Erlanger City Building on Commonwealth Avenue.
