Ahead of the 2025 legislative session, the Kentucky Chamber hosted its Legislative Preview Conference, featuring discussions from lawmakers and business leaders on addressing key issues to advance the Commonwealth.
Legislative Leadership
Senate President Robert Stivers and Speaker of the House David Osborne shared insights on what is to come during the next legislative session. They agreed their top priority is tax reform, and Speaker Osborne said a bill to reduce Kentucky’s individual income tax rate from 4% to 3.5% would come in the first week of the 2025 session.
Stivers spoke about the important progress that has been made since Republicans took control in 2016, and the key focus has been on fiscal responsibility, pointing to funding the pension system and building the Budget Reserve Trust Fund.
Reflecting on the outcome of the election, in which Republicans maintained a supermajority, Osborne said, “it is a testament to our members and a testament to our policies,” that all Republican incumbents won again. He noted it’s the third consecutive cycle a Republican incumbent hasn’t lost a race.
The leaders shared the importance of growing and strengthening Kentucky’s energy landscape and talked about the purpose of the new Energy Planning and Inventory Commission (EPIC). “We have companies who cannot expand because there is not enough (energy) generation,” Stivers said, noting increasing energy production and reliability is key to economic growth.
Stivers and Osborne, who are now the longest-serving legislative leaders in their respective roles, outlined other priorities and key issues, including addressing access to child care, education challenges, housing shortages, and more.
The Future of Workforce
As Kentucky continues to see economic announcements with major job creation, lawmakers are looking for ways to boost workforce participation and talent attraction.
Rep. Matthew Koch discussed the need for more work on promoting technical education to address Kentucky’s workforce needs. “I think we’re doing a phenomenal job with business attraction and need to do a better job with talent attraction,” he said.
He also shared some of the key efforts of the Workforce Attraction and Retention Task Force, including the growing shortage of male talent in the workforce and the underemployment of immigrants and military veterans.
The General Assembly has prioritized technical education in recent years, including passing legislation to expand scholarships for technical schools. Sen. Steve West, chair of the Senate Education Committee, emphasized the importance of more Kentuckians using the FAFSA to pursue higher education.
As child care is a top issue for businesses, Sen. Cassie Armstrong spoke on barriers that are holding parents back from working and issues that complicate the child care system.
Adding to that, Rep. Samara Heavrin said small businesses need more retention tools that support working families and pointed to legislation passed during the 2024 session that enacted paid family leave insurance.
Looking ahead, Heavrin spoke on a stakeholder group that is currently meeting to address the multitude of child care needs and create a path forward for Kentucky. That group is being organized in partnership with the Kentucky Chamber, Lift a Life Novak Family Foundation, and Convergence.
Artificial Intelligence
A panel focusing on the opportunities and challenges of artificial intelligence (AI) with Rep. Josh Bray, Rep. Derek Lewis, Sen. Brandon Storm, Jordan Harris of Deloitte, and Ellen Call of Charter Communications discussed how Kentucky can become a leader by using AI to improve efficiency and boost innovation.
Rep Bray and Sen. Storm spoke about the work of the Artificial Intelligence Task Force. Bray discussed the importance of balancing innovation with discussions on regulations and Storm discussed some of the existing laws that protect people from misuse.
Harris highlighted Kentucky’s strong foundation in building systems and emphasized AI’s potential to analyze data to advance transportation and infrastructure, health care, and education.
“The next ten years will be the most technologically exciting period of our lifetime,” Harris predicted, advocating for businesses and government to adopt pilot programs and test markets in Kentucky to explore AI applications. He also pointed to robotics and hardware as areas where Kentucky can lead the development of AI.
Lewis underscored that AI excels at tasks rather than entire jobs, suggesting it can streamline processes and prevent the kind of disruptions seen with the unemployment insurance system during the pandemic. “If we have a tool to streamline processes, why wouldn’t we use it?” he said.
Budget and Taxes
As Kentucky is expected to further reduce its individual income tax rate to 3.5% in January, Appropriations and Revenue Chairmen Sen. Christian McDaniel and Rep. Jason Petrie spoke on how the legislation is working to make Kentucky more competitive.
They emphasized the responsible way that House Bill 8 from the 2022 session was set up. McDaniel said the General Assembly crafted the legislation so that they would not have to reverse course and make drastic cuts. He said many other states have had to do this, and it has caused the issue to lose support.
The chairmen spoke on the important implications of tax reform and the in-depth analysis that must be conducted before making any decisions.
“If the legislature continues to practice “needs versus wants budgeting,” we will continue to have structural balances at the end of the cycle that create a healthy reserve,” said Petrie. When that happens, we have the opportunity to make one-time investments like we have seen in recent years, he added.
Petrie and McDaniel spoke on discipline as a crucial value when building the state budget and said that the moment the General Assembly takes its hand off the wheel and lets it go, the state is doomed.
Energy and Environment
A panel with Rep. Jared Bauman, Rep. Chris Freeland, Sen. Robby Mills, Hilda Legg of Legg Strategies, and Ryan Watts of the Kentucky Oil and Gas Association discussed energy and environment priorities for the Commonwealth in 2025.
Following the presidential election and new federal appointments, panelists said they are waiting to see what will happen. However, they hope there will be less regulation change every four to eight years, making it challenging for businesses and the Commonwealth to set long-term goals.
Panelists highlighted the importance of maintaining Kentucky’s energy leadership by pursuing efficiency and regulatory reform while ensuring safety and reliability. Each shared how reliability, affordability, and diversification are the most important factors in supporting business and population growth, especially as energy use increases.
“This is the defining issue of the next 20 years,” said Mills. “We must get it right—not just for Kentucky, but for the entire nation.”
Healthy Workforce
A panel with Sen. Donald Douglas, Sen. Steve Meredith, Rep. Amy Neighbors, Rep. Kim Moser, and Mark Marsh of Owensboro Health discussed the key issues in the health care industry and how they impact Kentucky’s economy and quality of life.
Liability in the health care industry was a key area of discussion. Neighbors said that unless Kentucky implements tort reform, it will struggle to attract and retain businesses. “We want businesses to want to come here and grow here,” she said.
Douglas talked about the strain on providers beyond patient care and how providers are spending more time on paperwork and administrative tasks when it should be on patient care.
Moser echoed these concerns and also discussed mental health challenges and policy that has focused on protecting the health care workforce. She also talked about substance use disorder policy and the challenge of changing certificate of need laws.
Meredith spoke on the challenges health care providers face in rural communities. With 40% of Kentucky’s population in rural areas, the number of health care providers does not represent that population. Meredith said that if we want to reduce costs, we have to increase the number of primary care providers across the state.
Meredith also said that rural providers are critical as patients do not have the resources to drive long distances to receive care. He also noted that businesses are unlikely to invest in communities without reliable health care facilities, further emphasizing the economic importance of rural health systems.
Election
Two weeks after the 2024 election, former Federal Energy Regulatory Commission Chairman Neil Chatterjee and Eric Hyers of Outperform Strategies spoke on the elections’ outcomes and the political landscape going forward.
Discussing the difference between federal and statewide voting trends, the panelists agreed that state-level elections are much different than federal ones. Chatterjee said it is not out of the norm for a state to elect a Democratic governor while voting heavily Republican at the federal level.
Panelists highlighted an area of bipartisan agreement is the need for a tough stance on China. Chatterjee noted that both parties are committed to returning jobs to the U.S. and winning the global AI race. He said the business community must find ways to communicate with the Trump administration on the value of trade.
As the Tax Cuts and Jobs Act from the first Trump administration expires soon, Chatterjee said getting it reenacted is a priority most can agree on. However, as the Republican Party shifts, he said it will take the business community‘s advocacy to illustrate how tax cuts will lead to job and economic growth.
Hyers said that Gov. Andy Beshear’s election could be a blueprint for Democratic elections nationally because of the way he ran on core issues that normal people care about, such as the economy, jobs, and infrastructure.
Hyers also emphasized Beshear’s popularity and said he remains one of the nation’s most well-regarded governors because his ability to connect with voters across party lines and by clearly communicating his ‘why.’
Chatterjee described Beshear as “an extremely talented politician,” but predicted he may be the last Democrat to hold statewide office in Kentucky for the foreseeable future, given the state’s increasingly Republican tilt. “It’ll be interesting to see what happens as the Democratic Party figures out its direction,” Chatterjee noted.
Newly-Elected Legislators
Newly-elected legislators, including Rep.-Elect Anne Gay Donworth, Rep. Peyton Griffee, Rep.-Elect J.T. Payne, and Sen.-Elect Craig Richardson, spoke on their reasons for running for office and what they hope to achieve during a panel led by Rep. Michael Meredith.