An amended version of the two-year spending plan for state agencies and programs was approved by the Kentucky House of Representatives on Thursday. According to the bill’s sponsor, Rep. Jason Petrie, the House Committee Substitute to House Bill 500 includes additional funding for K-12 public education, public safety and asset preservation at Kentucky universities.
“From the start, we said this bill would substantially change and it has. Our subcommittees and staff were able to gather enough information from stakeholders to craft this version. As a result, this committee substitute intentionally allocates taxpayer resources in a way that preserves and strengthens essential public services without overextending government,” Petrie said. “We’re still a long way from finished with the budget process, but this is a strong next step.”
The committee substitute to HB 500 reflects the House Majority’s commitment to look closely at state spending and make sure every dollar serves Kentuckians well. That means trimming outdated COVID-era programs, eliminating duplicate grants and incentives, cutting unnecessary administrative costs and consulting contracts, and ending programs that lack measurable results. It also means recognizing when services can be delivered more efficiently by Kentucky families, businesses, and community organizations.
To further these efforts, the two-year, $31.56 billion spending plan reduces expenditures across several cabinets and programs and includes a 3% reduction in executive branch spending in each fiscal year. The budget proposal gives agencies more flexibility in determining individual program funding to identify the best areas to make reductions. In addition, HB 500 HCS does not provide for all of the executive branch’s 800 agency budget requests, which totaled nearly $10 billion in new spending.
Petrie stressed that the updated version of HB 500 protects the state’s core priorities. Per-pupil SEEK funding, Family Resource and Youth Service Centers, Medicaid, juvenile justice, corrections, and programs and services for veterans are fully exempt from these spending reductions. Also exempt are programs learning and results educational services like Read to Achieve, extended school programs, and Jobs for America’s Graduates.
“By right-sizing and streamlining, we can maximize every dollar we spend on priorities like education, healthcare, public safety, and community stability,” Petrie added.
The version of HB 500 that cleared the House also funds the Kentucky Employee Health Plan at the actuarially determined amount, which includes a 14% increase for taxpayers in the first year, and an additional 10% increase in the second year of the budget.
As the budget moves to the Senate for consideration, lawmakers continue to ask for the data and information the executive branch used to build its agency budget requests. Their efforts include issuing a series of subpoenas on February 24 for data on skyrocketing costs associated with the Kentucky Employee Health Plan.
“This proposal brings us closer to a final product that emphasizes accountability, measurable outcomes, and a government that works for the people - not one that treats taxpayers as an unlimited revenue source,” House Speaker David Osborne added. “We want to improve the quality of life for all Kentuckians – and we can’t spend our way out of the challenges our state faces to accomplish that. No amount of taxpayer money will ever be ‘enough’ for those who refuse to set priorities.”
House Bill 500 HCS also exposes some of the commonwealth’s greatest challenges, including the $6 billion allocated over the next two fiscal years to pay for Medicaid. As lawmakers work on reforming the program to improve health outcomes and program management, Medicaid is second only to the amount allocated for K-12 public education.
Rep. Jason Petrie said the updated version of HB 500 protects the state's core priorities. The budget bill was approved by the House on Thursday night. LRC Photo
