Investing in the Future of Kentucky: House budget filed

Plan continues commitment to education, human services, infrastructure, and public safety

Update from Mark Hart (District 78): Have you ever heard someone say that you can learn what someone’s priorities are by looking at their checkbook? That is particularly true about HB 6, the House version of the state’s budget filed on January 16. While I continue to review the 251-page bill that has come to be known as the “Investing in Kentucky Plan,” it clearly prioritizes responsible spending, while efficiently devoting resources to maintain essential public services. The $124.8 billion spending plan again includes record funding for K-12 public schools and strategic investments in public safety, infrastructure, and health services. The proposal also includes major investments in mental health and substance abuse recovery and programs serving the state’s most vulnerable. The bill also includes raises for state employees and resources for local school districts to provide raises to their employees.

K-12 Education Funding:

• Increases the SEEK per pupil base by 4% to $4,368 in FY 25 and 2% for $4,455 in FY 26 for a total of $117 million in FY 25 and $164 million in FY 26 (including funding for full day kindergarten)
• Allocates on behalf of school districts an additional $9.7 million in FY 25 and $19.4 million in FY 26 for the statutorily required district payments to teacher’s retirement
• Provides an additional $44.5 million in FY 25 and $84.3 million in FY 26 for pupil transportation to support increases to 80% and 90% funding levels, respectively
• Increase General Fund by $16.5 million in each fiscal year for school resource officers on a reimbursement basis with a maximum of $20,000 per school

Postsecondary & Workforce Investment:

• Increases by $196 million over the biennium funding for the College Access Program
• Includes an additional $600,000 over the biennium for the Teacher Scholarship Programs
• Increases General Fund by $7.3 million in each fiscal year for a new Student Teacher Stipend Program
• Increases General Fund by $4.8 million in each fiscal year for a Pilot Teacher Recruitment Student Loan Forgiveness Program
• Provides $36 million each year to support a 4% inflationary increase to each public postsecondary institution, including Kentucky Community and Technical College System schools
• Includes $3.9 million each fiscal year to increase the Postsecondary Performance Fund.

Health & Human Services:

• Funds 100 new social worker positions over the biennium with an allocation of $15 million
• Includes $12 million in each fiscal year to maintain the $2 per child rate increase in Child Care Assistance provider reimbursement
• Increases foster care per diem rates with a $13 million increase in funds
• Includes $10 million in each fiscal year to continue the commitment to expanding the senior meals program
• Includes an additional $63 million over the biennium towards the expansion and enhancement of mobile crisis intervention services to divert those experiencing a behavioral health crisis from hospitals, jails, and prisons
• Includes $76.3 million over the biennium for an additional 1,000 Michelle P. waiver slots to assist individuals with intellectual or developmental disabilities live as independently as possible
• Allocates $78.1 million over the biennium towards 500 new slots in the Supports for Community Living waiver program to help those with intellectual or developmental disabilities live as independently as possible
• Provides an additional $31.3 million over the biennium for implementation of a waiver to provide services to those with serious mental illness
• Increases by $85.5 million biennium funding for implementation of a waiver to serve those with substance use disorder

Kentucky State Police:

• Includes $24.1 million in additional funds over the biennium to the KSP for pay increases for 1,013 troopers and commercial vehicle enforcement officers
• Provides $3.4 million over the biennium to support a 10% salary increase for 150 positions in the KSP forensic laboratories
• Increases KSP funding by $6.4 million in FY 25 and $17.7 million in FY 26 to fund Trooper cadet classes of 75 in each year
• Includes $710,000 in each fiscal year to both support seven additional full-time positions within the Sex Offender Registry program and provide for increased software service contract fees

Juvenile Justice:

• Increases funding by $20 million in FY 26 to support a medical services contract for primary care and mental health care at all juvenile justice facilities
• Includes $7.8 million in additional juvenile justice funding in each fiscal year towards alternative to detention programming
• Provides $7 million in additions funds over the biennium to support additional positions, screening tools, and training to implement evidence-based programming within juvenile justice
• Increases funding for debt service on juvenile justice capital construction projects to a total of $28.5 million over the biennium with an additional $3.4 million in FY 26

Prisons & Corrections:

• Includes $42.4 million over the biennium towards the expansion of the Little Sandy Correctional Complex to support staffing, medical care, education programming, addiction services, and reentry efforts
• Includes #128.9 million in FY 25 and $30.7 million in FY 26 in bond funds for debt service to support capital projects at adult correctional institutions.

Veterans Affairs:

• Provides for personnel and operating costs associated with the operation of the new KDVA nursing home in Bowling Green with an increase of $12.4 million in FY 25 and $15.6 million in FY 26
• Increases funding by $320,000 in each fiscal year to provide additional burial costs for National Guard and Reserve veterans who may not be eligible for federal benefits
• Includes an additional $76,000 in FY 25 and $152,000 in FY 26 to increase grant amounts to veterans service organizations
• Provides $1.1 million in FY 25 and $2.2 million in FY 26 to Kentucky Emergency Management to replace the loss of federal funding as a result of the closure of the Bluegrass Army Depot

Disaster Preparedness:

• Increases by $1.5 million over the biennium to provide the state match requirement to draw down additional federal funds for the Emergency Management Performance Grant Program
• Increases General Fund by $8.3 million in FY 25 and $7.8 million in FY 26 towards personnel and equipment costs related to the implementation of the Kentucky Urban Search and Rescue team created by the legislature in 2023

State Employees:

• Includes language requiring the secretary of the Personnel Cabinet to contract with an independent consultant to review all personnel and payroll records of all current employees from January 1, 2018, thru June 30, 2024, to determine the exact salary compression issues which exist in the executive branch
• Provides funding for a 4% inflationary salary increase in FY 25 and a 2% increment in FY 26
• Provides $500 million to pay toward the unfunded liability of the Kentucky Employees Non-Hazardous Pension system

Kentucky Teachers Retirement (KTRS):

• Increases funding to the KTRS pension 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
• Authorizes the use of $11 million in existing excess state funding for retiree health insurance in FY 25 and increases funding by $6.5 million in FY 26 to continue covering the cost of coverage for members who have retired since July 1, 2010, but are not yet eligible for Medicare

Clean Water:

• Provides an additional $30.1 million in FY 25 and $25.3 million in FY 26 for expansion of the Clean Water State Revolving Fund
• Increases funding by $84.6 million in FY 25 and $41.1 million in FY 26 for expansion of the Drinking Water State Revolving Fund

Broadband Expansion:

• Includes an additional $217 million in FY 25 and $868.9 million in FY 26 for broadband deployment as part of the federal Broadband Equity Access and Deployment Program (BEAD)

State Parks & Tourism:

• Provides an additional $1.2 million over the two fiscal years for additional project managers to assist with state park projects funded by the legislature in FY 22 and FY 23

• Includes debt service to support state parks capital projects totaling $132.2 million over the biennium.
• Increases funding by $2.05 million in FY 25 for Kentucky Exposition Center equipment replacement
• Increases funding by $1.7 million in FY 24, $2,158,500 in FY 25, and $2,163,100 in FY 26 for Kentucky Exposition Center operations growth

A proposal of this size requires time and work, as well as collaboration. HB 6 comes on the heels of two years of work as members of the budget committee, leadership, and other lawmakers worked with state and local agencies, advocacy groups, and other stakeholders to craft a spending plan that provides a common-sense approach to spending taxpayer dollars while investing in the state’s future. In addition to the budget, we also saw a measure filed that makes $1.74 billion in one-time investments in infrastructure, public safety, and economic development, as well as paying down the state’s public pension liabilities. That bill, HB 1, uses existing state resources. Neither bill includes tax or fee increases.