Gov. Beshear Breaks With Tradition Offers Budget Proposal Before Session

Gov. Andy Beshear broke with tradition this week by unveiling his version of the biennium budget before the start of the legislative session.  

Beshear, who officially began his second term in office last week, laid out his top funding priorities, which include teacher pay and universal pre-kindergarten. 

Beshear called for an 11% raise to “all public-school employees.” 

“Our public schools are the backbone of every community. And in many counties, they also serve as the largest employer. In fact, teacher salaries make up 10% or more of all wages paid in 26 Kentucky counties – that’s Bath, Bracken, Edmonson, Elliott, Estill, Gallatin, Garrard, Green, Henry, Hickman, Jackson, Knott, LaRue, Leslie, Lewis, Magoffin, McCreary, Menifee, Nicholas, Owen, Owsley, Pendleton, Robertson, Spencer, Trimble, and Wolfe. So, just imagine the local economic impact of an 11% raise to every employee of the county’s largest employer. And we have the funding to do it,” Beshear said.  

The governor is also seeking to fund universal pre-k for all 4-year-olds.  

“In the 2022-23 academic year, only 46% of kindergartners were considered kindergarten ready. That’s why my budget will provide $172 million each year to fund universal preschool for all 4-year-old children so that every child is kindergarten-ready,” he said. 

Beshear highlighted the strong economic growth the Commonwealth has experienced. This trend will continue after the Consensus Forecasting Group (CFG) adopted FY 2024-2026 revenue estimates that result in approximately the same as the current year in FY 2025 and 2.9% in FY 2026.  

In his budget, Beshear proposed $300 million for major transportation projects to ensure that Kentucky can meet the expectations of state matching requirements from federal grants. The targeted projects are the I-69 Ohio River crossing in Henderson and the completion of the Mountain Parkway project. The FY 2022–2024 budget approved $250 million for these two projects.   

Beshear also proposed an additional $100 million for the Kentucky Product Development Initiative. This initiative, now in statute following the initial $100 million approved in the FY 2022-2024 budget, would distribute $50 million each fiscal year to counties based on population, ensuring local governments have the necessary finances to have “build-ready locations.”   

The City of Paducah would receive an additional $3.5 million to complete the Paducah Riverfront Project, financed using the BUILD grant from the US Department of Transportation.   

The proposal would also provide $500 million in FY 2025 for the Better Kentucky Cleaner Water program, $30 million in FY 2025 for the Water Management Assistance Fund, $100 million in FY 2025 to support mega-projects that create at least 250 jobs and pay an average of $30 an hour, $15 million to assist localities with talent attraction, $50 million to fund general aviation airports, and $50 million to support a County and City Bridge improvement program to prioritize the replacement/repair of bridges.   

Beshear’s plan directs all funds from the Permanent Pension Fund to be transferred to the Kentucky Public Pension Authority (KPPA) to pay down the unfunded liability for the Kentucky Retirement Systems (KRS) nonhazardous pension plan. The Fund is financed through the collection of taxes on sports wagering.   

An additional, or 13th check, for Kentucky Employees Retirement Systems and State Police (SPRS) retirees was also proposed, but not for County Employee Retirement Systems (CERS) retirees. The plan would also move the Tier III Kentucky Employees Retirement Hazardous Plan and the State Police Retirement Plan to the Tier II plans.   

The proposal also provided one-time funds in the amount of $100 million to finance the new GRANT program outlined in 2022 House Bill 9 to assist localities in matching funds for federal grants and $75 million in the current fiscal year to replace expired funds in the East Kentucky SAFE Fund.   

Beshear also proposed a $2,500 salary increase in FY 2025 and an inflationary increase in FY 2026 for Kentucky State Police troopers, a $500 stipend increase in the Kentucky Law Enforcement and Firefighters Foundation Program funds for local and state law enforcement officers, and local firefighters. The stipend will now be up to $4,800, including certified part-time law enforcement officers to receive training incentives for the first time.   

Beshear’s proposal includes $146.1 million to construct a regional training center in Western Kentucky for the Department of Criminal Justice to expand training services for the western part of the state. 

A newly created Commonwealth Urban Search and Rescue Team will be funded with $8.3 million in FY 2025 and $7.8 million in 2026 for rapid disaster response. The proposal also provides $35 million for a body armor grant program for local governments.