'You come together.' Kentucky special session will direct $212M to flood relief

Eastern Kentucky could see more than $212 million in assistance under legislation revealed Wednesday on the first day of a special session of the Kentucky General Assembly to send relief to the flood-stricken area.

Twin bills filed in the House and Senate would set up an Eastern Kentucky State Aid Funding for Emergencies (EKYSAFE) fund nearly identical to one set up by the legislature this year to assist the Western Kentucky region devastated by tornadoes in December.

Lawmakers gaveled in Wednesday afternoon before quickly holding a joint meeting of the House and Senate budget committees to go over the final version of the relief bill.

Republican legislative leaders have indicated the legislation will be passed Friday, having worked out agreements in their chambers and with Democratic Gov. Andy Beshear before the session was called by him Tuesday.

Beshear held a joint press conference in the Capitol rotunda Wednesday with Republican Senate President Robert Stivers and House Speaker David Osborne — along with a dozen legislators from the flood-damaged region — in which they praised each other for working together behind the scenes for the past four weeks on the legislation.

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"Since the beginning of this natural disaster, there has been positive, productive communication between the executive and the legislative branch," Beshear said. "I don't call it bipartisan, I believe it has been nonpartisan."

Stivers — who represents Clay County, one of the areas hit hardest by the flooding — said the region withstood a 600-year flood, with the special session legislation providing just the first step of assistance for the region to get through the next six months, until the General Assembly returns for the 2023 regular session.

"This is a testament to what everybody does when something like this happens in the state," Stivers said. "You come together to make sure your friends, your neighbors and your families are taken care of."

Under the proposal, $200 million would be appropriated to the new fund from the state's rainy day fund, formally known as the Budget Reserve Trust Fund account, which currently holds a record $2.7 billion.

That $200 million would then be directed four different ways to assist affected local governments, public utilities and school districts.

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Much like the SAFE fund for Western Kentucky, $115 million of the $200 million fund for Eastern Kentucky will be administered by the Division of Emergency Management within the Department of Military Affairs to provide flood assistance for eligible entities, which include local governments, nonprofit or public utility service providers, state agencies or school districts impacted by the flooding in counties where there was a federal disaster declaration.

These funds can be used to replace and renovate publicly owned buildings damaged in the flooding, while also covering the costs of local governments to plan for rebuilding from the damage and reimbursing them for any services, personnel and equipment they provided in the response and recovery phase of the disaster.

The money cannot be used to build things in the 100-year floodplain, however.

Financial assistance also would be available for public school districts to avoid defaulting on bond payments and to help with building and tangible property replacement needs.

Of the $115 million appropriated, $40 million is set aside for local school districts and the nonprofit or public utility service providers.

An additional $40 million would be appropriated from the SAFE fund to the Kentucky Department of Education to cover extra expenses facing impacted school districts, including wraparound services for students and families and additional transportation funds to pick up displaced students.

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The remaining $45 million from the Eastern Kentucky SAFE fund would be directed to the highway fund of the Transportation Cabinet for reimbursement from their federal emergency disaster assistance.

Besides the $200 million in the region's SAFE fund, the legislation also would appropriate $12.6 million from Kentucky's reserved federal funds from the American Rescue Plan Act, which would go toward water and sewer infrastructure related to the flooding.

This funding would be limited to water and sewer infrastructure projects "necessary for recovery, the rebuilding of replacement school facilities, and not previously utilized housing sites designed to mitigate the risk of future flooding."

Stivers indicated in committee that recipients of SAFE funds would have to reimburse the fund if they later receive federal assistance from FEMA, with such a reimbursement equaling what they received from FEMA.

School districts to see more leeway

School districts in the flooded region would see more flexibility under the legislation. Several districts have delayed their school years, some indefinitely, as flooded schools are cleaned and evaluated.

Districts would be able to waive up to 15 instructional days missed due to the flooding between now and January.

Superintendents would be able to send specific groups of students to remote instruction for up to 20 days in the same timeframe. They'll also get more leeway to meet the state's required amount of instructional time.

Most of a long list of requests the Kentucky Department of Education made on behalf of districts ultimately made their way into the legislation.

The department "is happy the governor and the General Assembly are working together to quickly address the many needs facing our schools in eastern Kentucky after the historic flooding," said Toni Konz Tatman, the department spokeswoman.

Financial stability for Western Kentucky on the table

The legislation would give more opportunities for financial assistance to local governments and school districts in Western Kentucky from their SAFE fund, too, allowing them to recover from their realized revenue losses due to the tornadoes.

Under the plan, such Western Kentucky entities could receive assistance for 100% of their lost revenue in the 2022-23 fiscal year, 60% of lost revenue in 2023-24 and 33% of lost revenue in 2024-25.

This shift could be particularly helpful for school districts as they eye next year’s budgets amid expected massive drops in revenue from property taxes, one of their main funding sources.

Dawson Springs, which is home to a roughly 500-student district directly hit by December’s tornado, lost about $15 million in assessed property value. For the school district to continue to pull in the same amount in property tax revenue, it would need to raise its property tax 15 cents, Superintendent Leonard Whalen said.

A raise that large, Whalen said, is "just not doable. And I couldn't in good conscience even bring that up (to his school board)."

Whalen wanted to see a five-year tax stabilization from the state to cover the difference between what the district needs and what it has.

Reach reporter Joe Sonka at [email protected] and follow him on Twitter at @joesonka. Reach Olivia Krauth at [email protected] and on Twitter at @oliviakrauth. 

This article originally appeared on Louisville Courier Journal: Plan for Kentucky special session would direct money to flood relief