House approves amended executive branch budget

After almost two years of work to craft a responsible spending plan that balances the state’s current needs and its long-term well-being, the Kentucky General Assembly is sending a two-year, $128.4 billion spending plan to Governor Andy Beshear. The measure, House Bill 6, passed the House earlier today by a vote of 72-26. The proposal provides a two-year spending plan with funding for the vast majority of state agencies and programs.

“This budget ensures that essential services are not just maintained but enhanced, that necessary programs are strengthened, and that investments are made in the future of our communities. The measure also ensures that every dollar invested benefits the people of this Commonwealth,” Representative Jason Petrie, HB 6’s sponsor and Chair of the House Appropriations and Revenue Committee. “The bill reflects our dedication to efficiency and accountability, and should instill confidence in the state’s ability to navigate through challenges and take advantage of opportunities.”

According to Petrie, the budget continues the House Majority’s commitment to priority issues and the two-year spending plan includes record funding for K-12 public schools, and strategic investments in public safety, infrastructure, and health services. HB 6 also includes major investments in mental health and substance abuse recovery, and programs that serve the state’s most vulnerable.

“This is a strong spending plan,” House Appropriations and Revenue Vice Chair Adam Bowling added. “We’ve increased per pupil K-12 funding by 3% in the first year and 6% in the second, fully funded school transportation costs in the second year, and increased access to funds for school districts with a limited ability to raise revenue by increasing the Tier 1 equalization. This budget provides for our needs and builds on the foundation.”

Representative Josh Bray, who also serves as Vice Chair of the committee, added, “We know all too well how disasters have impacted Kentuckians as storms have taken their toll on Western and Eastern Kentucky, so I’m particularly pleased that we were able to provide for enhanced disaster preparedness. That includes additional funding for the Kentucky National Guard, Kentucky Emergency Management, and more than $16 million for the newly created statewide search and rescue team.”

The Governor has ten days to consider if he will sign the measure, veto it in its entirety, veto specific lines, or allow it to become law without his signature. For more information about HB 6 or any legislation considered during the 2024 Regular Session, please visit legislature.ky.gov.

Details from HB 6 include:

Providing Opportunities for Kentucky Learners

K-12 Education Funding:

• Increases the SEEK per pupil base by 3% to $4,326 in FY 25 and 6% to $4,586 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 the TRS
• Provides an additional $84.3 million in FY 25 and $124.2 million in FY 26 for pupil transportation to support increases to 90% and 100% funding levels, respectively
• Adds language allowing for the appointment of an Interim Commissioner of Education without Senate confirmation
• Includes an additional $10.7 million over the biennium to equalize all previously authorized recallable nickels at 100% and new recallable nickels at 25%, with the intent to equalize them in the next biennium
• Includes language encouraging school districts to utilize additional SEEK resources to provide raises for certified and classified staff; and report statewide assessment information on their websites
• Increases funding by $5 million in FY 26 for the Star Academy three-year pilot program of five charter schools
• Includes an additional $5 million in each fiscal year for the Educators Employment Liability Insurance Program
• Provides an additional $8 million over the biennium to establish additional Family Resource Youth Service Centers (FRYSC) where a FRYSC currently serves more than one school
• Increases by $2 million in each fiscal year funding to support the Center for School Safety
• Increases General Fund by $16.5 million in FY 25 and $18 million in FY 26 for school resource officers on a reimbursement basis with a maximum of $20,000 per campus

Postsecondary & Workforce Investment:

• Increases by $211.9 million in lottery and restricted funds over the biennium funding for the College Access Program
• Provides an additional $9.2 million in each fiscal year for the Work Ready Kentucky Scholarship Program
• Includes an additional $2.6 million 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
• Provides an additional $10 million over the biennium for the Innovative Scholarship Pilot Project
• Includes $1.1 million for the Kentucky Rural Veterinarian Loan Repayment Program
• Increases General Fund by $4.8 million in each fiscal year for a Pilot Teacher Recruitment Student Loan Forgiveness Program
• Includes $10 million for the Kentucky Healthcare Workforce Investment Fund established by the legislature in 2023 RS
• Includes an additional $281.5 million in each fiscal year for facility maintenance, renovations, and repairs at postsecondary institutions
• Provides $6.9 million each year to support a 4% inflationary increase to Kentucky Community Colleges and Technical School
• Includes $25.4 million over the biennium to increase the Postsecondary Performance Fund.
• Provides allocation for 45 new staff positions in each fiscal year within the Office of Unemployment Insurance
• Reauthorizes funding from previous budgets for replacing the unemployment system

Building a Healthier Kentucky

• Funds 100 new social worker positions over the biennium with an allocation of $9.6 million in restricted funds
• Provides $2 million in each fiscal year for the Employee Child Care Assistance Partnership matching contributions
• Maintains the $2 per child rate increase in Child Care Assistance provider reimbursement
• Increases by $49 million in general funds over the biennium to maintain CCAP reimbursements to child care providers for families at the 80^th percentile of the market rate survey
• Provides $8 million in FY 25 and $11 million in FY 26 for a relative caregiver (kinship) reimbursement rate increase
• Includes an additional $12.8 million in FY 25 and $18.5 million in FY 26 in general funds to support CCAP initiatives, including an income exclusion for eligibility determinations for child care providers; a six-month transition for families no longer eligible for CCAP, background check fees; and the establishment of an Innovations in Early Childhood Education Delivery Grant Program
• Provides an additional $2.5 million in fiscal year to support the Early Childhood Development Scholarship Program
• 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
• Provides an additional $1.1 million over the biennium to support staffing and operations at the Office of Dementia Services and the state long-term care ombudsman
• Provides an additional $3.6 million for the state match to access the federal data hub used for income verification for Medicaid
• Allocates an increase of $548.1 million towards Medicaid benefits in FY 24
• Provides an additional $394.5 million in general fund over the biennium for Medicaid benefits growth
• Increases General Fund by $3.6 million and Federal Funds by $9.1 million in FY 25 for 250 additional Michelle P. waiver slots and increases General Fund by $10.9 million and Federal Funds by $27.4 million in FY 26 for 500 additional Michelle P. waiver slots.
• Allocates $13 million in FY 25 for 125 new slots and $39.1 million in FY 26 for 250 new slots in the Supports for Community Living waiver program to help those with intellectual or developmental disabilities live as independently as possible
• Provides $8.5 million in FY 25 for 250 additional slots and $25.4 million in FY 26 for 500 million additional slots in the Home and Community based waiver program
• Includes an additional $726.8 million in FY 25 and $767.8 million in FY 26 for the continuation of KCHIP benefits and services
• Increases nursing home facility reimbursement rates with an additional investment of $455 million over the biennium
• 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 $85.6 million biennium funding for implementation of a waiver to serve those with substance use disorder
• Provides an additional $75.9 million over two years to implement a waiver for substance use disorder treatment for incarcerated individuals returning to the community
• Allocates $1.9 million more towards staffing and operations at local health departments
• Provides an additional $5 million over the biennium for pediatric cancer research
• Increases by $1.7 million over the biennium for the office of Medicaid Fraud and Abuse Control and adds reporting requirements
• Increases support for the Farms to Food Banks by $250,000 in FY 25 and $400,000 in FY 26

Investing for a Safer Kentucky

• Increases by $20 million in FY 25 to replace American Rescue Plan funds that supported the Rural Infrastructure Improvement Fund and were allocated to the Department of Corrections
• Includes an additional $9.8 million in FY 25 and $19.8 million in FY 26 to support staffing and services stemming from the expansion of Little Sandy Correctional Complex
• Provides $30.9 million over the biennium to support medical, mental health, and utility costs at adult correctional institutions
• Increases funding by $450,000 in each fiscal year to support the Child Exploitation Specialized Investigation and Prosecution Unit
• Increases by $1 million in each fiscal year the allocation for Freedom House, administered by Volunteers of America
• Includes $546,900 in additional funds over the biennium to support the development and operations of the Child Fatality and Near Fatality External Review Panel
• Increases by $160,000 over the biennium to support the required federal match for the Violence Against Women Act
• Includes $22.5 million in additional funds over the biennium to the KSP for pay increases for 1,013 troopers and commercial vehicle enforcement officers
• Increases funding by $6 million in FY 25 and $16.6 million in FY 26 to support classes of 75 Trooper cadets in each fiscal year
• Provides $2.6 million in FY 26 towards the purchase of a total of 50 marked and 50 unmarked KSP cruisers
• Includes an additional $27.9 million for the unified prosecutorial system for raises and new positions in commonwealth’s attorney and county attorney offices, a new case management system, and the rocket docket system
• Adds $2.5 million in each fiscal year for additional positions in Commonwealth’s Attorneys offices
• Includes language that prevents commonwealth’s and county attorneys from hiring family members after the passage of HB 6
• Increases by $2.2 million over the biennium for toxicology and DNA equipment as well as increased costs for evidence collection kits
• Provides $480,000 in additional funds to support the transition to agency-issued cell phones, which also replaces antiquated digital audio recorders and cameras
• 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
• Provides an additional $15 million over the biennium to increase access to the Body Armor Grant Program administered by the Attorney General’s Office to local governments
• 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 over the biennium towards alternative to detention programming
• Provides $7 million in additional funds over the biennium to support additional positions, screening tools, and training to implement evidence-based programming within juvenile justice
• Provides $169,600 in each fiscal year to support leasing 22 police-related vehicles for law enforcement vehicle operation training
• Includes $2.8 million in each fiscal year to support a transfer from the KLEFPF to the Office of the KY Law Enforcement Council Support
• Provides $325,000 in FY 25 to update the system used to track inmate, probationer, and parolee sentences, program credits, and services received for proper sentence completion dates

Honoring Service and Preparing for Disasters

• 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 $10 million in FY 26
• Includes an additional $1 million each year to USA Cares for programs aimed at preventing veteran suicide
• 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
• 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

Ensuring State Workforce Competitiveness

Current State Employee Workforce:

• Provides funding for a 3% salary increase in both fiscal years
• Includes funding to continue salary adjustments given to state employees between July 1 and December 31, 2023
• 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

Continuing to Address Public Pension Liabilities and Commitments

• In addition, the budget continues the commitment to funding the state’s public pensions at not just the statutorily required level, but at the actuarially required level. The Majority’s commitment to these funds is bringing them closer to solvency, but also impacting our overall financial picture:

Kentucky Public Pension Authority:

Provides $500 million to pay toward the unfunded liability of the Kentucky Employees Non- Hazardous Pension system

Kentucky Teacher’s 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
• Directs 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
• Amends sick leave liability reporting language to require the full actuarial cost of member sick leave as a percentage of payroll and in total dollars by debt source by December 1, 2025 in order to get a more accurate accounting of the liability
• Increases by $900,000 in FY 25 and $1.7 million in FY 26 to update and maintain the pathway system

Investing in Rural Kentucky

• Includes an additional $1.23 million for additional staff positions within the Kentucky Infrastructure Authority.
• Provides an additional $30.8 million in FY 25 and $25.3 million in FY 26 for expansion of the Clean Water State Revolving Fund
• Increases funding by $84.7 million in FY 25 and $41.1 million in FY 26 for expansion of the Drinking Water State Revolving Fund
• Includes an additional $217.2 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)
• Provides $2 million over the biennium for a one-time addition to the Kentucky Mountain Regional Recreation Authority (for a total of $1.75 million in FY 25 and $1.25 million in FY 26
• Increases funding for the Rural Mental Health, Suicide Prevention, and Farm Safety Program by $500,000 in each fiscal year and moves the program to the Department of Agriculture
• Appropriates funding of $150,000 in FY 25 to create a comprehensive agricultural plan
• Increases funding by $153,900 in FY 24, $443,900 in FY 25, and $443,900 in FY 26 for additional personnel for emergency preparedness within the Department of Agriculture
• Increases support by $1.5 million over the biennium to hire additional personnel for regulatory field services within the Department of Agriculture

Enhancing Tourism and Recreational Opportunities

• Increases funding by $2,050,000 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
• Increases by $4.69 million funding to the Kentucky Historical Society to support Sestercentennial Commissions
• Provides $800,000 in FY 25 for bioacoustics fencing at Lake Barkley Lock
• Provides an additional $64,200 to support the Governor’s School for the Arts
• Includes $700,000 over the biennium to support the Kentucky Center for African American Heritage
• Increases funding for tourism marketing by $3 million in FY 25 and $7 million in FY 26
• Transfers $1.75 million in FY 25 and $1.25 million in FY 26 in the statewide transient room tax funds to the Kentucky Mountain Regional Recreation Authority
• Includes an additional $500,000 in FY 25 to support a new temporary structure for the National Quilt Museum in Paducah
• Increases by $500,000 in FY 25 supports for the Southeast Chamber of Commerce for the Southern Kentucky Tourism Initiative

Increasing Government Transparency & Accountability

• Amends language relating to the approval of state aircraft travel to include all state officials
• Includes language that prohibits state agencies from mandating the purchase of electric vehicles and from issuing an RFP that is solely for the purchase of electric vehicles
• Allocates an additional $18.3 million over the two fiscal years to support the transition of the CHFS Office of the Ombudsman and Administrative Review to the Auditor of Public Accounts on July 1, 2024, as enacted in 2023 SB 48
• Includes an additional $2.25 million in each fiscal year to support lost revenue replacement
• Provides $750,000 in FY 25 to support the Jefferson County Public Schools Audit and allows the Auditor of Public Accounts to request as a Necessary Government Expense (NGE) up to $750,000 in FY 26