House Republicans unveil their version of state’s next two-year budget

Kentucky House Republicans recently filed their proposed two-year state budget focusing spending on education, infrastructure, public health, and public safety initiatives.

The budget includes increased funding for K-12 education, with increases to the per-pupil funding formula, school transportation, and Family Resource and Youth Services Centers as well as additional postsecondary funding.

The bill seeks to address the issue of teacher raises through language encouraging school districts to provide the increases for certified and classified staff by using additional resources in the K-12 funding model (SEEK).

Other highlights include investments in clean water and broadband internet access, Medicaid provider rate increases, money for new social worker positions, and pay raises for state troopers.

Some of the key investments in the bill include:

• $281 million over two years for K-12 SEEK per-pupil funding increases (including funding for full day kindergarten)
• $196 million more for the College Access Program scholarship fund
• Increases General Fund by $4.8 million in each fiscal year for a Pilot Teacher Recruitment Student Loan Forgiveness Program
• $600 million total for maintenance and repairs at state universities
• $548 million increase for Medicaid benefits
• $15 million for 100 new social worker positions
• $24 million for Kentucky State Police trooper raises
• $42 million to expand addiction treatment and reentry programs in prisons
• $30 million more for clean water and $126 million for drinking water infrastructure
• $1.1 billion in federal funds over two years for broadband expansion
• Provides funding for a 4% inflationary salary increase for state employees in FY 25 and a 2% increment in FY 26
• $500 million to pay toward the unfunded liability of the Kentucky Employees Non- Hazardous Pension system
• Increases funding to the Kentucky Teachers Retirement System by $159.2 million in FY 25 and $302.1 million in FY 26, as well as directing the use of $29.3 million in FY 23 excess to continue paying not only the amount required by law, but meeting the actuarially determined contribution in both fiscal years

House leaders said the “robust, fiscally conservative” budget aims to promote long-term stability while still investing in Kentucky’s future.

House Appropriations and Revenue Chair Jason Petrie also filed a separate bill, House Bill 1, appropriating $1.74 billion from the budget reserve trust fund to make one-time investments. That fund currently has a balance of $3.7 billion and current figures expect a surplus in FY 24 that could help replenish some of that money.

The appropriations made in that bill include money to pay down pension liabilities in multiple systems, infrastructure, and more.

Stay tuned to The Bottom Line for more details as the budget moves through the legislative process.