House Majority Floor Leader Steven Rudy sat down with The Bottom Line to recap the 2025 legislative session, highlighting policies that progressed tax reform, workforce participation, economic development, and regulatory relief for the Commonwealth.
Tax Reform and Economic Growth
Leader Rudy emphasized the long-term goal of eliminating the state’s personal income tax, noting legislation starting in 2018 that began to move Kentucky in that direction. This session, House Bill 1 lowered the rate to 3.5 percent starting January 2026. Additionally, House Bill 775 provides flexibility to the state’s tax “trigger” system, allowing the Commonwealth to continue momentum with smaller, more incremental reductions.
“We think it is the number one way to get people to move to Kentucky, and that’s a real driver to do that,” he said when discussing the process of lowering the income tax. “But we also can’t afford to just do it overnight like some states have tried previously. So it’s very thoughtful and systematic.”
Addressing Workforce Participation
With one of the nation’s lower workforce participation rates, Kentucky has taken several steps to increase its population and address barriers to employment, like the benefits cliff. Leader Rudy pointed to the passage of House Bill 9, which created the Medicaid Oversight Advisory Board, to encourage more individuals to transition into the workforce.
On housing, he acknowledged Kentucky’s shortage of over 200,000 units and said lawmakers will continue exploring solutions, including expanded support for manufactured housing and local models like those piloted in Lexington.
As the primary sponsor of House Bill 15, which lowered the age for a driver’s permit to 15, he said the measure removes barriers for young people to access after-school jobs and gain early workforce experience and aligns the Commonwealth with surrounding states.
Going forward, Leader Rudy pointed to artificial intelligence and energy policy as important issues and said those areas have the opportunity to create jobs and make Kentucky the best place to raise a family and start a business.
Small Business and Rural Development
To support Kentucky’s small businesses, Leader Rudy highlighted significant regulatory reform efforts, including House Bill 6 (the REINS Act), which gives lawmakers more oversight of administrative regulations, and Senate Bill 89, which curbs overreach on water-related property regulations.
He also discussed a focus on targeted investments in rural and agricultural economic development and new incentives for multi-county collaboration.
Looking Ahead to the Next Legislative Sessions
Leader Rudy reflected on his time in the House chambers and provided an update on the next legislative session. As the Capitol undergoes a major renovation, he said the session will take place in a temporary structure next to the Capitol annex for the next few years.
When asked about the large number of new lawmakers, he said that the strong mix of veteran and new lawmakers in the House will help the legislature continue to advance pro-growth policies.
“We’re building a bright future. We have a deep bench of great members who are truly public servants whose hearts are in the right place,” Rudy said.
Stay tuned to The Bottom Line for more legislative updates during the interim.