Beshear presents one-year budget proposal with increase in many areas and calls on Kentucky to be courageous

Kentucky Governor Andy Beshear addressed Kentuckians Thursday night to give his State of the Commonwealth and present his new one-year budget proposal.

The governor started his speech noting the nation is hurting from the adverse effects of a global pandemic and attacks on democracy seen Wednesday at the U.S. Capitol.

Beshear noted it is hard to believe how much can change in a year and added “in 2021, we will defeat the coronavirus and restore democracy” and the year has a chance to be “so much more” if the state chooses to step up and be bold in prioritizing its people and move into the forefront of a post-COVID economy.

The governor’s budget proposal puts $152 million dollars in CARES Act funding toward the repayment of the state’s federal loan for the Kentucky Unemployment Insurance Fund as well as $100.9 million in General Fund dollars which will be up to legislature’s discursion whether they keep in the budget or not. Beshear also said his budget includes $220 million in aid to small businesses and $20 million in aid to small non-profits. He said these items, totaling $340 million in General Fund dollars, needs to be enacted early in the session.

The budget proposal also includes $1,000 raises for teachers starting in 2022 ($48.8 million total) and a 1% raise for state employees ($11 million), as well as an increase in K-12 education funding by 1% per student which equals an increase of $31.9 million.

Colleges and universities see a $17 million increase in General Fund dollars which represents a 2% increase—1% going to direct appropriations to each institution and 1% to the Postsecondary Education Performance Fund.

One-time funds are used in the proposal spending $50 million to expand broadband to underserved areas, $100 million to restore some school facilities, $22 million to leverage private investment in emerging industries to create good paying jobs, and $100 million to go into the state’s Rainy Day fund.

Beshear says his budget prioritizes health of families by fully funding Medicaid and accommodates a 14% increase in Medicaid enrollment.

He also says the proposal fully funds both of the state’s retirement systems for state workers and teachers.  

The governor pointed to infrastructure as a key area of need for investment with monies going to broadband as well as stating it is time for the state to make larger investments in transportation.

“I am ready to step up and I hope others are too,” Beshear said.

There are many other areas of increase in the budget proposal and no cuts.

Beshear finished his remarks by stating it is time for the state to be bold and courageous to move into the post-pandemic economy.

The state budget director will present on Beshear’s budget proposal to both the House and the Senate Friday morning and the legislature will then begin to craft their versions of the budget.

Following the address, Kentucky Chamber President and CEO Ashli Watts made the following statement:

“As the first step in the budgetary process, we thank the Governor for his commitment to funding education, Unemployment Insurance Trust Fund, infrastructure and broadband-areas in which we must invest as we come out of the COVID-19 pandemic. We look forward to working with our legislature to help pass a responsible budget that will prioritize restarting our economy and getting Kentuckians back to work.”

Stay tuned to The Bottom Line for updates on the budget process and other legislative issues throughout the 2021 session.