A bill that cleared the Kentucky Senate Wednesday would redirect $8.5 million of state funding away from a Somerset nonprofit that nearly used the funds to make a controversial land deal.
Last year, the legislature appropriated the funds to the Center for Rural Development to create a regional training center. The nonprofit pushed for a late amendment that year for it to receive the funding instead of the Lake Cumberland Area Development District, made up of officials from 10 counties in the region.
In October, Kentucky Public Radio reported that local officials had concerns the Center for Rural Development was planning to use $1.3 million of the funds to purchase land at a significantly inflated cost from the chair of the Pulaski County Republican Party. Four days later, the group announced that it was pausing the purchase and seeking different property for the site, though it denied any wrongdoing.
Concern over last year’s controversy has spread into the current session, as House Bill 606 on an unrelated matter had a late amendment Wednesday morning to switch the recipient of the funds back to the Lake Cumberland Area Development District.
Republican Sen. Chris McDaniel of Ryland Heights, the chair of the Senate budget committee, said he added the change due to lingering concern about the aborted land deal last fall.
“We really try hard to avoid controversy in what we do,” McDaniel said. “And it just felt like with everything that had come forward, that it was probably better back at Lake Cumberland ADD.”
The 2024 bill directed $8 million to the center in the fiscal year ending this summer and an additional $500,000 in the following fiscal year. The Department of Local Government indicated last year they had already delivered the funds, but McDaniel said it is his understanding that the state agency had not done so.
McDaniel said if any funds have been delivered to the Center for Rural Development, “then we will be looking to get them back.” Asked what mechanism the state could use to get the funds back, he answered: “We’ll find one.”
Lonnie Lawson, the longtime CEO of the Somerset nonprofit, did not respond to an email asking for his opinion on HB 606 and how much of the state funds it has received.
Spokespersons for Gov. Andy Beshear, whose office houses the Department of Local Government, did not respond to an email asking how much of the $8.5 million has been delivered to the Center for Rural Development.
Andrew McNeil, the president of the conservative Kentucky Forum for Rights, Economics & Education, had been critical of the Center for Rural Development’s potential use of the funds last year and praised the HB 606 amendment to redirect the money.
“Kentuckians are lucky the Center for Rural Development’s intended abuse of their tax money was discovered before it was squandered,” McNeil said. “Placing responsibility for this workforce development project back with the local area development district will give taxpayers confidence the funding will be managed properly.”
The Center for Rural Development has long had close ties to 24-term Congressman Hal Rogers, who has been both praised and scrutinized for his role in directing hundreds of millions of federal and state dollars to the nonprofit and others affiliated with it.
The House still has to pass the amended version of HB 606 in order to be sent to the governor’s desk for his signature or veto. Friday is the final legislative day before the governor’s veto period, after which the General Assembly can override any vetoes with a majority vote of each chamber.
An additional late amendment to HB 606 would allow public funds to pay for school resource officers at private K-12 schools.
The two-year state budget bill passed last year appropriated $34.5 million to the Kentucky Department of Education to assist local districts’ funding of officers’ salaries. The amended bill adds “nonpublic schools” as an additional recipient of those funds.
State government and politics reporting is supported in part by the Corporation for Public Broadcasting.
