The timing and delivery of his budget address was atypical, as Kentucky governors usually do so in January of even-numbered years to an audience of the General Assembly in the House chamber.
However, Beshear decided to outline his next budget two weeks in advance of legislators gathering for the 2024 session, citing House Republicans’ unusual move in 2022 of releasing their own state budget bill before the governor.
Speaking at a media briefing earlier that day, Beshear said his decision to jump to the front of the line this time was because the House GOP budget from 2022 left out important items that later had to be inserted in the bill when it reached the Senate.
“If you run the executive branch every day, you're in the best position to put together a proposed executive branch budget,” Beshear said.
Beshear’s budget address highlighted several familiar priorities, as he already outlined recommended appropriations in areas like education, public safety and infrastructure earlier this year. Those previous announcements came amid his reelection campaign. The governor won a second term in November.
The budget proposal spends more than $33 billion from the state’s General Fund from mid-2024 to mid-2026, with the budget reserve trust fund remaining untouched at $3.7 billion, a state record.
As he promised on the campaign trail, Beshear’s budget includes a dramatic increase in funding for early education and child care. This includes an 11% raise for all public K-12 school employees and full funding for universal pre-kindergarten — two items that will cost $1.4 billion over the next two years.
“We have to step up to say that the future of Kentucky’s education is important enough to invest now,” Beshear said in his KET address.
Citing Tennessee’s recent passage of a bill that will eventually provide teachers with a 22% raise, Beshear said his proposed raises would lift Kentucky teachers’ average pay from near the bottom to 25th.
“I think everybody sees what Tennessee has done – a state with the Republican governor and a Republican legislature – and sees the competitive disadvantage we're at if we don't push forward,” Beshear said at his briefing.
Related to expanded pre-K, Beshear said $141 million of additional funding for child care assistance to providers will both provide both needed early education for children and more opportunities for parents to enter the workforce.
Related to at-risk children, the budget includes funding for 100 additional social workers and $20 million for a 12% rate increase for certain foster homes. For the state’s juvenile justice system, the budget adds funding to renovate youth detention centers, as well as $8 million for services that provide an alternative to detention.
Beshear’s budget also calls for continued investment for infrastructure and economic development projects, including $500 million for water system projects and $200 million to develop “build-ready” sites to attract major businesses.
In addition to $300 million to speed up major transportation projects — like the Interstate-69 bridge in the west, expansion of the Mountain Parkway in the east and a toll-free Brent Spence Bridge expansion south of Cincinnati — the budget calls for a $32 million one-time tax credit to underwrite tolls paid by Kentuckians who drive over the new bridge in Louisville.
On public safety, the governor’s budget proposal has another $2,500 raise for Kentucky State Police troopers and funding to hire 150 more. The budget would also change the retirement plan of new troopers and those hired since 2014 from the current hybrid cash balance plan to a defined benefit plan.
While Beshear released his budget first, Republicans hold a dominant supermajority in both chambers of the legislature and will have the final say on what is in the final budget passed into law in the 2024 session.
Republicans are likely to want to spend far less than what was appropriated in the governor's budget, with potential tax cuts in mind for 2025 and beyond.
A 2022 bill set up trigger mechanism to lower the individual income tax rate by half a percent each year, but those conditions were not met this summer to reduce the tax rate to 3.5% in 2025.
While the amount of the budget reserve trust fund met the condition for the first trigger, it did not meet the second as state spending in the last fiscal year was more than the amount of revenue the state would have brought in if an additional income tax cut of 1% had been in place.
This story has been updated.
