Gov. Beshear: State Budget Builds on Economic Momentum, Invests in Improving Key Infrastructure

Budget also includes investment in higher education, workforce – but Governor says lack of investment in pre-K, K-12 education harms Kentucky’s future

FRANKFORT, Ky. (April 11, 2022) – Today, Gov. Andy Beshear announced that the upcoming fiscal year 2022-2024 state budget passed by the General Assembly builds on the economic momentum the state is experiencing by making game-changing investments in infrastructure – like high-speed internet, cleaner water, roads and bridges – while making it easier for emerging businesses to move to Kentucky. The Governor said the budget also helps ensure every region in Kentucky sees economic prosperity, with significant investments in higher education, career and technical training and workforce development.

“These are the areas we must invest in today to help the commonwealth become a national leader by turning two years of incredible progress into 20 years of prosperity for Kentucky’s families,” Gov. Beshear said. “With these dollars, we are going to make major investments in critical infrastructure needed to build a better Kentucky and create and attract the jobs of the future.”

The Governor unveiled his budget proposal in January, which was based on a record-setting revenue surplus, with $1.9 billion more in General Fund revenues than budgeted. Strong fiscal management coupled with the greatest year for economic development in the state’s history set the table for significant investments.

The Governor said that while there is a lot to celebrate, the General Assembly failed to make much-needed investments in pre-K, K-12 and Kentucky’s educators. He also noted that they borrowed more than ever before and created new programs and policies without the funds to pay for them. Gov. Beshear said he vetoed a section of the legislative budget where lawmakers gave themselves a raise. He also vetoed his own pay raise, as well as one for other constitutional officers. To read the Governor’s budget related line-item vetoes, click here: House Bill 1 and House Bill 243.

The upcoming budget includes key investments proposed by Gov. Beshear:

Water and Sewer Improvements
The Governor said the new budget will expand on his efforts to improve water and sewer systems across the commonwealth. Over the next biennium, $250 million will go to support the Better Kentucky Plan’s Cleaner Water Program and provide clean drinking water and new sewer systems to Kentuckians.

Expanding High-Speed Internet
The budget directs an additional $100 million from the federal infrastructure bill and more than $2.3 million in state funds over two years to support the expansion of high-speed internet and, for the first time, the creation of the Office for Broadband. Last session, through a bipartisan agreement, Kentucky’s Broadband Deployment Fund launched, which included $300 million in state funds to address the connectivity needs of unserved and underserved communities. Combined with at least 50% required matching federal investments, a minimum of $600 million will support broadband expansion in Kentucky, creating more than 10,000 direct and indirect jobs. 

Advancing Major Transportation Projects
The Governor said with all the businesses and employees landing in Kentucky, it is imperative the state continues efforts to improve critical infrastructure across the commonwealth. The budget makes a historic investment of $250 million from the General Fund for Major Transportation Infrastructure Projects. Specifically, this is targeting three projects: the Brent Spence companion bridge project, the I-69 Ohio River crossing in Henderson and the completion of the Mountain Parkway expansion project. The one-time funds are meant to give Kentucky the flexibility to meet state match requirements for expected federal grants.

Building a Site Identification and Development Program
The Governor said making sure we don’t drop the ball on economic development momentum requires a focus on modernizing our infrastructure so we’re able to attract the next Ford- or Toyota-size project. To help address this crucial need, for the first time ever, the final budget includes $50 million each year to develop megasites and $100 million in fiscal year 2023 for counties to develop.

Launching a Life Science Lab
Gov. Beshear said his administration is working to attract the jobs of tomorrow through smart investments in industries with great promise. The budget invests $15 million in the City of Covington to support the construction and outfitting of a shared research and development lab facility to serve the rapidly expanding life sciences sector in the region.

Supporting Career and Technical Education
To help meet the needs of the future workforce, the budget supports Career and Technical Education (CTE) programs with $170 million to help renovate 24 locally operated CTE centers. In total, local area vocational center operating funds increase more than $58.1 million each year and state operated career and technical centers receive more than $6.8 million.

Supporting Higher Education
The Governor’s proposed budget provided the highest funding increase for higher education in decades. The final budget does increase funding for postsecondary education institutions with $80 million each year. Combined with the additional $17 million provided in the prior budget, this budget continues to restore some of the $250 million in budget cuts these institutions have suffered since the Great Recession. The budget also funds the Bucks for Brains program with $40 million to be matched dollar-for-dollar with private donations. Bucks for Brains helps the state support our world-class economy by aligning postsecondary education with emerging needs of business and industry. These funds also help students prepare for employment and nurture an entrepreneurial climate. For the first time ever, the budget funds the asset preservation fund with a major $683.5 million investment.

“We can’t let our schools crumble,” said Gov. Beshear. “I am proud we are going to be making this type of significant funding investment for the first time in 20 years.”

The Governor also recommended funding to support the state’s two Historically Black Colleges and Universities (HBCUs): Simmons College of Kentucky and Kentucky State University.

Improving Salaries for State Employees
The final budget includes an 8% across-the-board raise effective July 1, 2022, for state employees. Raises for fiscal year 2024 are dependent upon the next session of the General Assembly. The Personnel Cabinet will issue a report with recommendations that will inform the legislature’s decisions on raises for fiscal year 2024. As supported by Gov. Beshear, state social workers, family support workers, state troopers, vehicle enforcement officers and public advocacy workers received targeted salary increases. This is the first pay raise for state workers since fiscal year 2015. The budget also includes body cameras for Kentucky State Police troopers as well as funding to hire more 200 social workers.

Expanding the Everybody Counts Program
The Governor said bridging the gap between learning and workforce participation is crucial to Kentucky’s future. The administration already has been actively engaged on this issue, launching the innovative Everybody Counts program in Jefferson County last year.

“We have great partners – Ford, UPS, GE Appliances and Kroger. They’re helping us move toward a goal of having every high school senior, before they graduate, hired into a job, enrolled in postsecondary education, or both,” Gov. Beshear said. “With this budget, we will have $10 million to extend this important program.”

Protecting Children, Seniors and Families
To further carry out his commitment to addressing domestic violence and child abuse, the Governor said the state budget will increase funding to domestic violence centers, rape crisis centers and child advocacy centers. These centers not only help during the immediate moment of need, they also help survivors go on to lead full, healthy lives. The final budget also provides full funding for senior meals as well as a rate increase for residential and therapeutic foster care providers and a $2 per-child, per-day increase in the child care assistance program reimbursement rate. This one-time funding will use ARPA funds to continue the temporary increase through June 30, 2024.

Caring for Kentucky’s Veterans
The enacted budget makes significant investment in Kentucky’s brave military community. Funds are going to support the Military Family Assistance Trust Fund. Money also is going to create a permanent memorial honoring Kentucky Medal of Honor recipients at the campus of Freedoms Foundation in Valley Forge, Pennsylvania. The budget provides funds to expand veteran services, including boosting staffing at four Kentucky veteran cemeteries. And more than $1 million in fiscal year 2024 is going to phase in operations at the newest state veterans center in Bowling Green.

Investing in Communities
The Governor said that the budget also includes investments in local communities that he initially proposed, including $10 million to expand Waterfront Park, connecting downtown and West Louisville along the Ohio River. Phase IV of the park’s expansion will extend the park by 22 acres to the west between 10th and 15th streets. The Louisville Zoo will receive funding to construct new habitat trails. The Barkley Regional Airport in Paducah is also receiving funds to continue improvement projects, and through a partnership with the Kentucky Community & Technical College System (KCTCS), additional funds will go to support an aviation program.

List of key Governor’s items not included in the final budget:

• A record investment in K-12 funding through the SEEK formula – the enacted budget has over $680 million less for SEEK than the Governor’s budget;
• Funding for universal pre-K;
• Funding for a pay raise for teachers and school staff;
• Restoration of past budget cuts to textbooks and professional development;
• Better Kentucky Promise Scholarship program;
• Loan forgiveness programs for teachers and social workers;
• Hero Pay with $400 million from ARPA funds;
• Staffing to restore services at local and regional unemployment insurance offices;
• Agritech research and development facility;
• Funding for the Commission on Women;
• Increase in funding for the Commission on Human Rights, and
• Funding to modernize Kentucky’s central public health laboratory facility.

The General Assembly also did not return all coal severance tax revenues to coal-producing counties, restore local library grants or provide additional support for counties impacted by December’s deadly tornadoes.