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School funding, health insurance concerns addressed in latest iteration of the state budget

Kentucky's state Capitol building. The photo is taken from the other side of a construction fence lined with semi-translucent green fabric. Between the Capitol and the fence is a large crane which extends out of frame. The dome is covered in scaffolding.
Clay Wallace
The state Capitol is closed for its first major renovation in 70 years. It is expected to reopen in time to hold the 2029 regular session.

The current version of Kentucky's next two-year budget bill addresses some critics' concerns about education funding and a proposed cap on the state contributions to public employees’ health insurance costs. But the process is far from over.

The initial budget framework did not include any increases in per-pupil funding, which is administered under a program known as Support Education Excellence in Kentucky, or SEEK. Republican Rep. Jason Petrie, who chairs the House Appropriations and Revenue Committee, said the committee substitute changed that.

"We're basically doing a 2% increase in FY '27 with another 2% in FY '28," he explained, while listing off changes to the bare bones budget introduced earlier in the session.

Lexington Democratic Rep. Lindsey Burke expressed relief that the funding increase had been added, and that the spending cap on public and school employee health insurance was scrapped.

"Some of my anxieties have been abated and I really thank the majority for your work because it means a lot that SEEK is growing (and) the Kentucky Employee's Health Plan is secure for at least now," she said.

Although Democrats responded favorably to those revisions, other concerns loom large.

"This budget is going to cause a lot of harm if not changed," Gov. Andy Beshear said Thursday. "The House budget has $1.4 billion less in it for Medicaid than the projection. What will that do? It's going to hammer rural and urban healthcare."

Republicans, meanwhile, have shown their continued interest in maintaining a healthy rainy day fund — with the current package adding $612 million — as they look to control spending with an eye toward further reductions in the state income tax.