After almost two years of work to craft a responsible spending plan that balances the state’s current needs and its long-term well-being, the Kentucky General Assembly is sending a two-year, $128.4 billion spending plan and a $2.7 billion one-time investment bill to Governor Andy Beshear. The budget continues our commitment to education, infrastructure, public safety, and human services. The two-year spending plan includes record funding for K-12 public schools, and strategic investments in public safety, infrastructure, and health services. HB 6 also includes major investments in mental health and substance abuse recovery, and programs serving our most vulnerable.
Education: Education represents the largest portion of our budget and we made every attempt to get funding to the level closest to students. The education investments included in HB 6 represent the largest increase in funding since the passage of the Kentucky Education Reform Act (KERA). The final version of the bill includes a provision that encourages school districts to utilize additional SEEK resources to provide raises for certified and classified staff.
An increase in SEEK funding by 3% in the first fiscal year, and 6% in the next fiscal year for a total of $612 more per pupil over the two-year period.
Funding to cover 90% of transportation costs in FY 25, and fully fund the costs in FY 26
Increased General Fund monies by $4.8 million in each fiscal year for a Pilot Teacher Recruitment Student Loan Forgiveness Program
An additional $2.6 million over the biennium for the Teacher Scholarship Programs
$7.3 million in additional funds in each fiscal year for a new Student Teacher Stipend Program
Child Care: Kentuckians need access to safe, quality, and reliable child care and we have been working for several years to address the state’s shortage in child care providers. The budget we passed includes a heavy focus on the Child Care Assistance Program (CCAP), a proven program that subsidizes child care costs for parents and guardians who are working and/or in school and meet other eligibility criteria:
$2 million in each fiscal year for the Employee Child Care Assistance Partnership
An additional $56 million funding over the biennium to maintain CCAP reimbursements to child care providers for families at the 80th percentile of the market rate survey
$17.8 million more in FY 25 and $19.8 in FY 26 to support CCAP initiatives, including an income exclusion for eligibility determinations for child care providers; a six-month transition for families no longer eligible for CCAP, background check fees; and the establishment of an Innovations in Early Childhood Education Delivery Grant Program
An additional $2.5 million in fiscal year to support the Early Childhood Development Scholarship Program
Health & Human Services: A substantial portion of our budget goes to providing for the state’s most vulnerable citizens. It was a critical priority for us to fund additional social worker positions, as well as to increase foster care per diem rates and maintain the increase in child care assistance funds. Health Services – which includes Medicaid funding – represents another big portion of our budget. With more than a third of Kentuckians receiving Medicaid, the state must commit billions to draw down federal funding. The budget includes:
An additional $1.1 billion in funding for Medicaid benefits growth in FY 24, $1.2 billion in FY 25, and $2.1 billion in FY 26.
An additional $726.8 million in FY 25 and $767.8 million in FY 26 for the continuation of KCHIP benefits and services.
Increases for nursing home facility reimbursement rates with an additional investment of $455 million over the biennium.
Funding for additional slots for the Michelle P, Supports for Community Living; and Home and Community Based waiver programs.
Includes funding for a waiver for those with serious mental illness.
Public Safety: We’re investing in those who protect and serve our citizens. HB 6 includes significant resources for the Kentucky State Police (KSP), forensic crime laboratories, and the body armor grant program administered by the Attorney General’s Office. The budget we passed includes the following:
$22.5 million in additional funds over the biennium to the KSP for pay increases for 1,013 troopers and commercial vehicle enforcement officers.
Increases funding by $6 million in FY 25 and $16.6 million in FY 26 to support classes of 75 Trooper cadets in each fiscal year.
Provides $2.6 million in FY 26 towards the purchase of a total of 50 marked and 50 unmarked KSP cruisers.
Increases KSP funding by $6 million in FY 25 and $16.6 million in FY 26 to fund Trooper cadet classes of 75 in each year.
State Employees, Public Pensions, & Retiree Benefits: Decades of neglect have left the state’s personnel system uncompetitive with other public sector employers and made it difficult to attract talented individuals to serve Kentuckians through state agencies and programs. While efforts to improve the situation continue, lawmakers approved raises for the second consecutive budget. HB 6 includes funding for a 3% raise in each year. We also allocated more than $20 billion to shoring up our public pensions. We have made major reforms to ensure they are viable and have worked to ensure that those who make decisions have the right priorities in mind. Now more than ever, it is imperative that we keep a mindful eye on how our retirement dollars are managed.
In addition to the budget, we sent the Governor HB 1, which provides $2.7 billion over the next two years to fund projects within state government and in communities throughout the Commonwealth. With this funding, we are making targeted investments in road, rail, river, air, and water infrastructure and school facilities, public pensions, tourism, and community development.
The Governor has 10 days to consider these two bills and all others we sent him while the legislature recesses. We will return on April 12 and 15 to consider overriding any vetoes and finish any pending issues we still have on the agenda.
As always, I can be reached anytime through the toll-free message line in Frankfort at 1-800-372-7181. You can also contact me via e-mail at Amy.Neighbors@lrc.ky.gov and keep track through the Kentucky legislature’s website at legislature.ky.gov.
(Laura Leigh Goin, Deputy Chief of Staff for Media Relations – House Majority Leadership)