On the final day before the veto period of the 2022 session, both the House and Senate passed the biennial state budget plan which allocates $31 billion in general fund monies over the next two years. The budget includes record spending in education, a focus on economic development and workforce programs, pay raises for all state employees, and full funding of Kentucky’s pension obligations with additional payments to ensure the funds’ solvencies. The final budget plan leaves more than $1 billion in funding unspent.

After months of planning, House Bill 1 passed the House with record speed in January of this year, with the Senate then slowing things down and formally making changes last week. Details of the final version were presented during a meeting of the budget conference committee, comprised of leadership from the House and Senate, on Wednesday morning.

Here are a few of the highlights of programs and funding included in House Bill 1:

Education

• Fully funds all-day kindergarten.
• Increases SEEK funding from current $4,000 per pupil to $4,100 in year one and $4,200 in year two of budget.
• Funds 70% of SEEK transportation costs for school districts in both budget years, the highest level of state funding in history.
• Increases funding to eligible Family Resource and Youth Services Centers (FRYSCS) from approximately $184 to $210.
• Funds $40 million for the Bucks for Brains at research and regional universities.
• Provides $2.2 million to provide a Workforce Development Trust Fund for KCTCS institutions.
• Allocates $14 million in year two of the budget for the Employer Child Care Assistance Program established by House Bill 499.

Workforce

• Increases reimbursement rates through the Child Care Assistance Program with $12 million in funding.
• Fully funds the actuarial required contribution for the Kentucky Retirement System at $1.2 billion per year and allocates additional funding for the Teacher Retirement System and State Policy Retirement Fund.
• State employees will receive a raise of at least 8% in year one and 12% in year two of the budget, with additional raises for social workers, legislative branch employees, and state troopers.
• Funds $500,000 for an audit of state-sponsored workforce development initiatives.
• Directs $200 million to the Kentucky State Fair Board for overhaul of the fairground facilities in second year.

Economic Development & Infrastructure

• Allocates $100 million for a Rural Product Development Initiative for business site development.
• Directs $250 million from American Rescue Plan Act (ARPA) funding towards clean water and wastewater projects to be allocated to each county by population.
• Allots $175 million to state parks for upkeep and the overhaul in the second year of budget.
• Allocates $250 million for major infrastructure projects.
• Directs $200 million to the Kentucky State Fair Board for overhaul of the fairground facilities in second year.

Along with House Bill 1, the General Assembly also passed House Bill 243 relating to the legislative branch budget and House Bill 244 relating to judicial branch sending. The budget bills now head to Governor Beshear for consideration during the 10-day veto period.