Turning to news in Frankfort, Kentucky's House Republicans have unveiled their first stab at the state budget for the next two years.

It funds state agencies K through 12 and higher education and more.

The House budget chair says agencies will need to make their case for the additional $10 billion.

And executive branch budget request.

As House GOP leaders seek to rein in spending and rightsize government's focus.

As our June Lefler reports in tonight's legislative update.

This is just the first draft of the General Assembly's most important document this session.

Unlike in prior years, where we have prepackaged, hundreds of decisions, if not thousands, and been able to move through the process fairly quickly this session.

And these bills are designed differently, especially the executive branch, so that we have a bare bones budget.

There are no line items that have been placed in this.

These operational budgets.

So to that end, you'll see one that what normally is a 250 something page bill is about 150.

The chair of the House budget Committee says lawmakers and constituents will fill the gaps.

How long will it take?

Mr.

speaker, I wish I could answer that as fast as we could, but no earlier than we need to.

Though the state faced a $150 million shortfall this fiscal year.

Revenues should climb modestly the next two years.

Today, we do not have a revenue problem, but we always have to fight spending that's out of control.

And that's what a major theme of this budget is going to be.

The left leaning Kentucky Center for Economic Policy released its analysis of the proposed budget, saying, quote, the budget shortfall, funding for school transportation by $129 million a year and freezes the seek base and other parts of K through 12 school funding.

It cuts higher education institutions by $339 million over the biennium, or a remarkable 15%.

The plan also leaves an unexplained shortfall of over $800 million in Medicaid funding over the two year period, and reduces funding for community based services by nearly $100 million.

Without explaining how new costs from the federal government's H.R.

one for Snap and other public benefits will be covered.

The big beautiful bill passed last July requires states to take on more cost to administer Medicaid and Snap.

Among many things, Governor Andy Beshear proposed millions of dollars to meet that task and make up for additional Medicaid losses, explains the state's budget director.

Kentucky may be at risk of losing 35 rural hospitals.

And so the governor wanted to come up with an idea to help bridge some of that.

He came up with 125 million to assist rural particular hospitals in reaction to that.

House Republicans did not propose dipping into the $3.7 billion budget reserved trust fund for one time expenditures.

Lawmakers are not obligated to do this, and it's only become more common in recent years.

However, Republicans have not ruled out such a spending plan as they begin their lengthy budget process.

For Kentucky Edition, I'm Jim Leffler.

Thank you John.

And the budget also does not include any money for pre-K, which has been a bill and an effort that the governor has called for for several years.

The House bill does call for spending cuts of 4% in fiscal year 27 that begins in July, and 3% in the second year of the biennium for most state agencies.

House Bill 500 includes nearly $15 billion in annual base level spending, which is less than what it was approved two years ago.

There are educational exemptions from the proposed budget cuts and juvenile justice veterans affairs, behavioral health and corrections are also spared from budget cuts.

In this House draft.

More to come on that.