Kentucky.

Tonight I'm Renee Shaw and we thank you so much for joining us this evening.

It's always the big ticket item during the even year 60 day session.

And that's passing a two year budget.

The Kentucky Senate voted for a plan last week that spends $34 million more than the House plan passed last month.

So there are some differences.

But both budgets give state workers 2% raises.

Both would increase per pupil funding for education while still spending less than.

Governor Andy Beshear had requested.

A conference committee is now at work ironing out the differences the two budgets have.

And tonight we'll talk about those differences and what kind of compromises are likely to emerge, what will end up in the budget and what's likely to be missing.

We'll discuss all this.

We have five guests in our Lexington studio.

State Senator Amanda Mays Bledsoe, a Lexington Republican and vice chair of the Senate Appropriations and Revenue Committee.

State Senator Reginald Thomas, a Lexington Democrat and Senate Minority caucus chair Kate Shanks senior vice president of public affairs for the Kentucky Chamber of Commerce.

Jason Bailey, executive director of the Kentucky Center for Economic Policy and Andrew McNeill president and senior policy fellow at the Kentucky Forum for rights, Economics and Education, or Kentucky free and deputy state budget and policy Director and Governor Matt Bevin.

Administration a few years ago.

And in our Louisville studio, we have state Representative Tina Bojanowski, a Louisville Democrat and member of the House Appropriations and Revenue Committee.

Certainly, we want to hear from you tonight.

You can send your questions and comments by X, formerly known as Twitter, at Pub Affairs KET.

You can send an email to KY Tonight at KET dot o r g, or use the web form at KET dot Johnny Nash KY tonight.

Or you can simply give us a call at one (800) 494-7605.

Welcome to all of our guests here in Lexington and in Louisville.

We appreciate your time.

So let's discuss first the proposed spending, and then we'll talk about what she proposed to save and maybe what you propose to give away separately.

So, Senator Mays Bledsoe, I want to start with you, Senator.

Senate Budget Chairman Chris McDaniel had called the Senate version of the budget, quote, it reflects a disciplined approach.

I'm sure that you agree with that.

What are the highlights of the Senate version of the budget that you would like to bring to attention that you did differently from the House?

>> We largely kept many of the same things.

I think we strive to be very structurally balanced, using one time money for one time expenses and not to do one time for reoccurring.

We were very mindful to keep a healthy reserve in the Budget reserve trust fund.

We also worked to reduce liabilities like pension and make sure we're investing in some of our health care and other issues.

But most importantly, we took a very measured approach to government services and making sure providing them at a stable and consistent level.

>> Yeah.

So I also want to ask you, Senator Thomas, what are you pleased with in the Senate budget plan, or do you view anything as missed opportunities at this juncture?

And this is still an early negotiating juncture.

Correct.

>> Well, we're certainly pleased with the fact that they did give state employees a raise.

We had proposed the governor had proposed something in the area of 3 to 4%.

They gave 2%.

But that's still a step in the right direction.

And it does continue our movement forward to fully fund our pensions.

Get the Kentucky Teachers Retirement System fully funded by 2040.

I think we can make that even earlier now, given some changes in the budget and then Chris and Kentucky Employees Retirement System funded by 2044.

So we're making good progress there.

>> So you're saying where the unfunded liability now that it would be fully funded by 2040.

>> 20 teachers by 2040, Chris by 2044, maybe even 2042.

So that's good.

I do think Renee, and I have to say this because I strongly agree with Governor Beshear that that not addressing universal pre-K is a missed opportunity.

That's only a $220 million expenditure.

They're already 78 school superintendents, Renee 78.

That said, they can start it to tomorrow and not even address that.

It's a missed opportunity, particularly when over half the states now in this country, Renee, five of the seven who are neighbors have some form of universal pre-K.

It's a missed opportunity.

>> So I want to go to Representative Tina Bojanowski, who's in KET Louisville studio, to ask you about the House version of the budget.

And as a public school educator in Jefferson County public schools, were you happy with what the House had appropriated for K through 12 education?

>> So the SEEK number for the House is a little bit higher than what the Senate had.

So I do prefer that.

But if we look at SEEK, even since 2018, SEEK was $4,000 in 2018.

And if you account for inflation in today's dollars, it's 5095.

So the highest Senate year is 4774.

And that's still where we're funding education at a lower level if you count for inflation.

And then secondly, I think that both the Senate and the House have not fully funded transportation.

So transportation is funded at $398 million.

And we actually need another $93 million to fully fund transportation costs across the state.

And then one more thing personally.

So we have since 2010 paid into what's called the shared responsibility plan, where 3.75% of my paycheck every month, every every two weeks goes towards retired employees, health insurance.

And our understanding in that agreement is that once that fund is fully funded, that we wouldn't have to pay that.

And there is language in both bills, the House and the Senate, that says that amount won't change.

So even if shared responsibility is fully funded, we as teachers will still be paying.

>> Yeah.

Any comment on that?

Senator Thomas?

>> Well, I will say this, Renee.

What what that will do is get us faster to fully funding our pension, which is really important for teachers.

You know, I understand his concern.

You know, she has a she has a meritorious position, but I suspect with that additional money that's going to go now, all of it, all of it into the teachers retirement system that we'll probably see PDs retirement funded, fully funded by 2040, maybe 2038.

Renee when you think about it, that's just ten years from now.

We could be that fund could be fully funded ten years from now, 10 to 12 years from now.

That's a great thing given where we was ten years ago when we were talking about a 20% rate of fully funded, we didn't even know whether we meet our obligations at that point in time.

We've come a long way, and we just got a few more years left to go to get to that fully funded point.

>> Jason Bailey, I want to ask you, you said that the Senate budget makes modest improvements, but it doesn't go far enough.

And you have even said that K through 12 education remains in the Senate version woefully underfunded.

Explain more.

>> Well, for about 20 years now, we have not, as a state, kept up funding for K-12 education with the cost of providing that education.

And we're losing ground in both versions of the budget.

The State SEEK contribution that Representative Bujnowski mentioned, it would be 25% less than it was 20 years ago.

So that's a problem for the quality of education we're able to provide for our ability to attract and retain qualified teachers to the to the to the positions.

And it's, you know, even in the case of transportation that Representative Borkowski also mentioned, I mean, that's the legislature's own law that was created to create a formula to fund education in this budget.

It would not be funded.

And that would be 24 consecutive years of just not following their own law and suspending the law.

So, you know, we've got billions in the budget reserve trust fund.

We've we've passed tax cuts that cost now billions of dollars a year.

It seems like education has is among the things that has not been prioritized.

Even when more resources have been available these last few.

>> Andrew McNeill do you feel that education.

K through 12 education in Kentucky has not been prioritized?

Or do you believe enough money or more than enough money is going toward the public education system?

>> Yeah.

Thanks, Renee, for having us on tonight and for having a great group and panel with us.

This question of adequacy.

And this is going to be a little bit different direction than perhaps this conversation normally goes.

This question of the amount of funding we need to begin changing it to look at what exactly funding is directed towards.

There is a body of research coming out of Stanford University, national economists that look at this question that once you reach a certain level of funding, once you reach a certain level of funding.

So I'm not going to sit here and try to suggest that funding doesn't matter for education, that additional funding in and of itself does not correlate with higher performance by students.

What the money is directed towards and the strategies that they fund is what is far more important.

So this question of, you know, $10 here, $15 there, $20, even a couple of hundred dollars here on what the SEEK per pupil student appropriation is missing.

The fundamental question.

The question is, what exactly are those dollars going to do to improve student performance in the classroom?

I'm going to make one quick point about this, because it's something that you've probably talked about on the show a number of times.

Reading proficiency, you can throw millions of dollars, tens of millions of dollars at reading strategies that if it's not phonics, then you're not going to see the improvements that you could if you were funding the right strategy.

And so I know that this is a traditional question that comes up adequacy of funding, amount of funding, I would suggest to the General Assembly and to the public out there where the money is going, is the question that we need to start asking going forward into the next biennium.

>> So Kate Shanks, the Kentucky Chamber has always been very interested in making sure that there's a well trained, well educated workforce in order to recruit more businesses and have more economic development opportunities.

How does the chamber view education funding in the K through 12 space and maybe even post-secondary education?

Because we know there are differences there between the House and Senate versions.

>> That's right, Renee.

And so we look at it holistically.

And absolutely, that's the K through 12 piece and the conversation around SEEK funding and other aspects.

I'm glad that we brought up pensions already.

This is something, you know, the Kentucky Chamber was very involved in when we did pension reform a few years ago, the leaky bucket, the leaky bucket, that is the report that we did, we did ten years ago, 15 years ago.

It's been a repeating report that we put out there.

And it's a very important topic.

And I think when you think about the amount of money that has to go in to shoring up the pension system, that's a substantial amount of money that could be going towards all sorts of different needs that we have in the Commonwealth.

And so I'm pleased to hear the Senator talking about when we might pay down that debt and get back on track.

So I think that's a very important conversation.

But regarding education, we do look at it holistically.

And so we've seen some funding provided, I think, for higher ed, additional funding on performance based funding.

We look at things like the work study scholarship program, where we continue to prioritize, prioritize that, provide funding for that.

Those are scholarships for individuals who want to go work in some of those most in demand industries in Kentucky.

And so we also look at, you know, to Andrew's point, accountability.

And I think you're seeing the legislature take that up in a variety of bills.

And I do want to mention one bill, and it's gotten a little complicated, but Senate Bill four is legislation that we worked with Senator West on, came out of the Senate, and it dealt with leadership programs for school principals.

This is near and dear to our heart.

At the Kentucky Chamber, we have been training school principals for years in recognizing that providing additional leadership training because they are like the CEOs of their school.

What's really important for supporting the schools and what Senator West found when he did some research in this area, is that retention of teachers.

Of course, you know, you think salaries and that's an important discussion, but really it's the leadership of the school and the principal.

And so he took this on with Senate Bill four.

We're big supporters of that work that he's doing and continuing to advocate for that because we think that that's important.

But we look holistically at the budget when we focus on education in terms of post-secondary higher ed workforce training, so that we can be sure that people have the credentials they need to meet our workforce needs.

>> I want to go to Representative Brzozowski real quick because on Senate before, even though this is not about that, but we knew that there was an amendment that was attached on.

And I know that you want to go there too, Senator Thomas, that deals with the school boards of the two largest school districts in the state, Jefferson County and Fayette County, where there would be two appointed board members from the state treasurer.

So talk to us.

Do you agree with that approach or does that muddy the waters when it comes to principal leadership, should that be separated out in your view?

>> Well, it definitely took a bill that had unanimous bipartisan support and made it much more contentious.

So what Senate Bill four, as amended in the House will do, is it shifts us from having seven school board members in Jefferson County to five elected members and two appointed members.

Now, with the the struggles that JCPS has had with budget in the last year or so, I think that it seems pretty rational to put individuals who have a a finance background onto the school boards.

I think that that that can definitely be supported and it maintains, except for the two appointed positions, five elected positions.

So there's other legislation, Senate Bill 114 that would create an entirely appointed school board.

And I find that highly problematic.

So, you know, since I've come in the General Assembly, this is year eight, there's been angst about JCPS year after year.

And we're we're worried.

Are you going to break up the district?

Are you going to just have appointed boards?

And there are so many amazing things happening in the district.

My hope is if this is the bill that goes through that, we can then move forward and we can figure out what kind of services and supports our students need to be successful and not just have, you know, that negative connotation about the district, the community and the General Assembly need to feel like JCPS is in a position to move forward.

And even though it's highly contentious, I think that this amendment to Senate Bill four might help to do that.

>> Do you agree, Senator Thomas, that this is one way to restore some public confidence, particularly in these two districts where there are significant budget deficits, more so with Jefferson County than Fayette County?

>> Renee, I understand Senator Volkanovski's position, but but let me tell you this, okay.

From the time we've had free public schools in this state, we've always had local school boards elected by local people.

The school boards have always been accountable, Renee, to the public.

And this radically changes this with the amendment to say, now that you have two members on that board who are accountable to no one, no one, I think it gives that authority to the state treasurer.

>> Yes, but they have to have ten years of financial expertise.

>> Renee.

That doesn't matter.

That doesn't matter.

>> When you're dealing with $16 million budget deficits or $187 million budget deficits, that.

>> Doesn't matter when you're talking about a a board that deals with free public schools where the public sends their children to that school, the people who are making policy decisions on that board should be accountable to that body.

When you have anyone on that board, Renee, who are who are not accountable to the public, then you can influence decisions in a way that the public may not have wanted to.

Anytime you have someone on the board who's in the, you know, in that decision making body and they're not accountable and you got a close vote, they can influence that decision and they're not accountable to the public for that decision.

>> But they could not serve as chair or vice chair.

Right.

The two appointed.

>> They have a vote, though.

They're voting members.

And let's not ignore that, Renee.

They're not they they do have a vote on that board.

And that's a dangerous precedent and one that I'm certainly opposed to.

>> All right.

So we're going to put a pin in that because that will probably come up again a little later.

We've gotten several questions.

And these are kind of non sequiturs right.

So we're going to pivot from different areas here.

Let's take this one from Patricia in Fayette County.

Why do Christians in Kentucky not get to claim the 10% that they tithe to their churches when they're getting turned down for SNAP benefits, especially when many of our representatives are Christians and claim the 10% on their own income.

That's a little stumper.

I think of a question.

Patricia Andrew can you make some?

>> No, I'm sorry to that.

It's always good to hear from the folks out in the public, but I don't know if anybody on the panel has any insight into that question.

>> Right.

Those are tax deductible contributions.

>> They are if you itemize.

>> If you.

Yeah.

Right.

Okay.

From Anthony and Louis County, why aren't legislators supporting a cost of living adjustment for Kentucky retirees?

And Anthony, you are on to something because in the Senate version of the budget.

Senator Mays Bledsoe, it's not necessarily a cost of living adjustment, but is there there is a 13th check.

Explain what that is.

>> So my understanding before I came to the General Assembly is that they weren't going to do Colas until we fully funded the liability, and that won't be, I believe, until 2036.

Perhaps the way we're we're going.

And so that's why they've not done in the past.

Done Colas.

I completely understand the frustration of people who have been without a cost of living increase, especially given how much costs have gone up.

And so the 13th check is a way to one time to kind of infuse some resources into acknowledgment of those who have served, especially the longest, and have been waiting for that for a very long time.

>> They get more than those who do.

>> It's a scaled approach.

If you serve more than 17, you get the full amount and then it's less as a way to encourage those who have worked for the state, to be honest.

>> Yeah.

Andrew.

>> Yeah.

This is one area of concern that I have with the state budget as it currently stands.

And of course, we're talking about the Senate version there in the conference committee.

They're going to hammer out a lot of differences.

And it's not so much with the decision to provide this 13th check.

But I think that we are stepping up to a structurally imbalanced budget.

Again, the funding for that is coming from a state employee insurance trust fund.

As I understand, it's not general fund.

>> We're taking that from the DOI, the $350 million Department of Insurance fund.

>> Yeah, but.

>> That is one time cost money for one time use.

>> I do understand that.

But but it is a fund transfer in a sense to fund a one time expense.

Most of the one time expenses have been moved into what was once House Bill one is now House Bill 900.

Wright the other thing, and we'll get a little bit into the weeds here.

I'm seeing the return of non-governmental expenses or expenditures.

And that is something that was a very serious contributor to structural imbalance in the last decade.

The money that is provided for the identification of nuclear ready sites, that may very well be a proper idea and something that could be a strong investment in the state going forward.

But you got to dig in.

There had the benefit of writing some budgets in my time in the state budget director's office.

So I know where to look.

You know, that $75 million is written as a non-governmental expenditure.

And so I'm not suggesting that this budget is structurally imbalanced in the way that we have seen in the past, when it was really bad.

There's a little bit of a slippery slope here.

I know that times are a little bit tighter, but we've done better in the past.

I commend the fiscal responsibility that both majorities have practiced, especially in this decade.

But there's a couple of things in there that are concerning about where the source of funds is coming from.

For some of the expenditures that the General Assembly is.

>> Making.

And Chairman McDaniel had said, Senator Mays Bledsoe, that this is a structural, balanced budget.

I think that's what he said.

Right.

The Senate version.

Yes.

>> And I think that that has to go back to one time, use money for one time cost.

And in this way, you know, the House version took that money to the budget Reserve trust fund.

We could have sent it there and then written a one time expense from it.

And so some of that is coming from an operating budget of DOI in that way.

And we just allocated it differently for one time use.

And I think what I would mention is that the governor did some very creative work trying to make his budget priorities, including using the DOI for Medicaid, including rolling back an MCO payment to to July instead of that current year that saved about $500 million that he could then put to his initiatives.

So some of this is creative budgeting.

Sometimes it's tools.

I think the structural balance that I think both of us are committed to out of the conference committee is ensuring that it makes sense that the one time operating expenses are in the operating budget and that one time capital investments are what time costs are in 900.

To separate those two things and be wise about one time costs and recurring expenses.

>> Yeah.

So Jason Bailey, I want to go to you.

>> Well, I think I think that is a, is, is a good approach when times are good.

The issue is that, you know, the reason we used to call it the rainy day fund is that the main reason for budget reserve trust fund is rainy days.

And it's actually to fund recurring expenses that have a temporary shortfall because the economy is down or, or the demand is up.

We don't have that quite yet.

Mostly we have a tight budget because of state policy decisions, state income tax cuts that are reducing the budget.

But when, if and when the time comes that we hit a recession, I hope we will pull down that rainy day fund to fill recurring gaps that are temporarily created by shortfall.

But, you know, I wanted to bring up, if I could, Renee, I think one of the biggest issues that remains in the budget to be decided and the biggest holes is in the Medicaid program, where both budgets are significantly underfunding Medicaid relative to what the the agency indicated was necessary to provide just a continuation budget.

And in the when you once you count the federal money.

The thing about Medicaid is that for every dollar we put in, we get three federal dollars.

So the economic harm of of shorting Medicaid or cutting Medicaid is, is compounded.

And we know that it hits, particularly in rural areas, in rural hospitals and rural providers and clinics that are already seeing cuts because of H.R.

one that passed Congress last summer.

So, you know, both budgets have a shortfall once you count the federal match of about $2.7 billion in Medicaid.

And that, I think, is the largest hole in what we're seeing.

And, you know, in the last budget they did, the legislature did use budget reserve trust fund money to fully fund Medicaid.

At the end of the at the end of the budget, they came in and provided that money because it needed to be provided.

So I you know, I hope that that's one of the issues that is is addressed in the conference committee because we've already seen we saw a maternity center closed last two weeks ago in Lincoln County because of federal Medicaid cuts.

You know, we're seeing we have 35 rural hospitals at risk of closure because of the federal cuts.

And if the state is also cutting back and the governor indicated that they would have to cut payments to providers, they would have to eliminate services if the budget came in the way it is at this moment.

That's a real problem.

>> Any response on this side?

>> I'll comment on it.

I mean, the health care system, of course, is incredibly important.

It has economic implications for our state.

You know, the Chamber, we have members from all parts of the health care system, the managed care organizations, private insurers, pharmaceutical providers, the hospitals.

And so we we keep in touch with our health care members constantly.

And, you know, we are conveners.

We can bring people together.

And what I will say about Medicaid is you have to expect that the General Assembly is going to continue to study this issue thoroughly.

It is a large chunk of our budget.

It is important to a lot of Kentuckians that are served.

It impacts providers.

It impacts the economy as a whole, and it I think there's goals associated with it.

And, you know, when we look at our work at the Chamber, we really focus on jobs, creating jobs and removing barriers that people face to reach their economic potential.

And our goal ultimately, is that people who make use of public benefits, that it's temporary for most people and that they can move off of benefits and that they can be self-sustaining for themselves and their families.

And so in addition to the work that we do with our directly with our health care members, we are fighting for jobs in Kentucky and we are fighting for workers and working families.

And that means a lot of different things.

And, you know, you'll see us this year and you did a whole session on this, Renee.

It was wonderful fighting for childcare and private childcare facilities and childcare workers and those working families that are struggling with childcare, needing to find more childcare, more affordable childcare.

That is one of our top issues because we want to support working families.

And when you have a member of the family, a parent that takes themselves out of the workforce because they can't access it, that might mean the family is now dependent on public benefits.

We are also working on housing this year.

It's one of our top issues.

We are supporting seven different bills across the Senate and the House.

I expect there will be perhaps one big, beautiful housing bill or a couple of bills that are passed by the legislature, focusing on increasing supply of housing in Kentucky so that we can support working families.

This is critical.

We have a 200,000 plus shortage of homes in Kentucky.

And when you learn about supply and demand and price back in our economics 101 days, if there's demand and there is demand in Kentucky, you got to increase supply.

And so we see legislators, Senator Mills, Representative Witten, Representative White doing a lot of great work on housing.

And so we'll be focusing on that.

And so I think that, you know, in addition to working on the health care policy specifically and knowing that the legislature is going to study this in great detail, we have to continue to focus on economic growth, creating jobs, and making sure Kentuckians have what they need to fill those jobs, reach their economic potential, and support themselves and their families sustainably.

In Kentucky, this will grow our population.

This will grow our revenues, this will grow our economy.

And that needs to be the focus.

But undoubtedly, you will see the legislature continue to work on this through the budget, through the Medicaid Oversight and Advisory Board.

And I think it's important topic for them to continue to work on.

>> We know that the Kentucky Chamber also favors a continued gradual phasing out of the individual income tax.

Do either one of the budgets, House or Senate version, try to rush that process to get to zero?

>> No, I don't think so at all.

I think it's a measured approach to reducing the individual personal income tax.

We were one of the first advocates out of the gate for that.

We advocated in 2018, when leader Rudy passed tax reforms.

We advocated in 2022 with the passage of House Bill eight, which created the personal income tax reduction process, especially for the legislature to take.

And we advocated in 2025, last year, when they made reforms to that process where we might see incremental or smaller increments of reduction in the income tax.

And this has been incredible for Kentucky.

And it's very much important that as Kentuckians face inflation, affordability issues, that the legislature is putting more money back in the pocket of Kentuckians.

That's what we're seeing.

And then that money is getting spent in the economy.

And you see that in sales tax and other revenues.

And when you look at the reduction that we've seen in the income tax over the past couple of years, because of that, you haven't seen a dollar for dollar reduction in revenues.

And in fact, our revenues are up relative to 2021.

I think we had about a less than a $14 billion budget.

Now we're looking at a $1,516 billion.

We've seen revenues grow even though we've been able to reduce the income tax.

We also saw record employment to 2 million jobs on record jobs actually on record in 2023.

So we've seen growth in revenues in the economy and jobs since reducing the income tax.

And we're seeing our competitor states do it as well.

Lots of states post Covid reduce the income tax.

So we are 100% on board with that.

And we think it's important policy for the Commonwealth.

>> If I can return Jason, unless you want to comment there, I want to return to SEEK real quickly.

If you.

>> Well, we're seeing cuts in this budget because of the income tax cuts.

We're losing revenue $780 million for each half point.

And we have a $2.7 billion shortfall in Medicaid.

In this budget, we have 7% cuts for many state agencies in this budget.

So I do think the legislature is beginning to hit the wall on its on its ability to continue to reduce it.

I don't see the Senate budget aiming to reduce the income tax further over the next two years.

I don't see the House budget doing that very much.

The original version of the House budget did aim to reduce income tax cuts or to have future income.

Further income tax cuts.

But there was an outpouring because it would require state employees and retirees to have a 78% increase in their health insurance.

And people were like, no, we're not going to do that.

And so the House came back and and put more money in the budget to prevent that.

So it's very expensive.

And I think the legislature is is really hitting the wall on this so-called march to zero, because the more you cut, the more you have to trade off in funding for schools, for health care, infrastructure and other things we need.

>> So returning back to education, this questioner from Fayette County says, can the panelists please explain the State SEEK funding?

Oh, boy.

And how that's paid?

Is it true that certain counties like Fayette pay more of the per student cost than others?

If so, why doesn't each county get to keep the school taxes raised in their respective counties?

This is an exceptional question, and it has an exceptional, probably complicated answer.

Who wants to take a shot first?

>> I'll go first.

Okay, okay.

The SEEK formula is designed to equalize payments to all schools across the state so that your wealthier counties don't receive more for their per pupil education than your less wealthy or your poorer counties.

It equalizes it across all schools.

And that's the beauty of the of Cara.

Now, what I want to tell the the writer there is that what happens is if a, if a county is able to pay more in taxes toward their schools, then that money to the county from the SEEK formula, that will be reduced so that at the end of the day, the amount of money they're getting per pupil is equal to what other counties are getting.

So that's what she's referring to, is that all schools will get the same, but some counties will receive less state dollars because they have more local tax dollars to pay, and sometimes will receive more state dollars because they have less taxes to pay.

But at the end of the day, it's all equal.

>> Representative Bozinovski, do you think if it's equal, is it fair?

>> Well, I mean, I think it's fair that every child in Kentucky could have an equitable amount of funding applied to them.

So in in response to the question, any local taxes that are raised are kept locally, but it's our state tax that is then appropriated across the state.

So Jefferson County pays a good hunk of the state tax, and that is distributed statewide.

So, yes, I think it's very important that every child has equitably funded education.

>> And Jason Bailey Casey has done studies about this before, that the gap between more wealthy urban districts is not on par with poorer ones.

>> Right?

All the SEEK formula tells you is how to allocate the state money, how to apportion it among the districts.

It doesn't.

The legislature decides how much to put in it.

You know, that's just a that's just a judgment call.

And so the goal is equitable school funding.

But if the state doesn't put in, you know, enough, it becomes unequal.

And that's what's happened over over time.

Is that the gap in funding between wealthier and poor school districts has grown.

And it's actually we estimate it's bigger now than it was when when the state Supreme Court ruled that the funding was unconstitutional.

So it's it's it is it is bozinovski.

A lot of people have this impression that their their local school taxes are being taken from them.

That's not true.

But how much is being supplemented is is a decision of the General Assembly through the formula.

>> Any response on this side before we move through this question from Woodford County, please explain why money set aside to address compression pay.

This is, I guess, salary compression pay is only going to be given to two departments, and the rest of the money is going to the budget reserve trust fund, rainy day fund.

This money was set aside to address this for all state employees affected.

>> I believe we're talking to the Commonwealth attorneys and Commonwealth.

>> We did in the county.

>> Attorney, the county attorney's.

>> I think they're talking about money in the permanent pension fund that the $67 million that was for pay compression across the board.

>> So we did two studies on that.

And you'll have to ask Budget Director Hicks on why that was a recommendation to remove that funding.

But the idea had been that it had been taken care of by the administration, and there was some disparities in the Commonwealth attorneys and Commonwealth that we did address, because that was done in the last budget to make that make that resources back up.

But there was also a line item, I believe, in the House that referenced transportation and c h of the cabinet for Health and Human Services, and we took that out more for conversation of what we're really trying to do there.

The compression is a very hard issue.

It is a challenge, especially in government, when you continue to have people brought in at a higher pay.

When you get people who have served for a long time, it is something that we have done some decent addressing of it, but it is not an issue that goes away quickly.

So I think you'll see that come back.

>> Up and have lawmakers gotten all the data that they need from the personnel cabinet to make an informed decision about how to address salary compression.

>> That's debatable.

And that's part of part of some of the challenge.

>> I think Secretary Bailey will say that that she's given both chairs everything they've asked for regarding compression.

She she will tell you that.

>> All right.

So moving back to education, because education is always the big topic.

This from Billy Berry from Henry County says, quote, pre-K for all is highly supported in Kentucky by 63 County judge executive's 35 Kentucky mayors, the Kentucky Association of School Superintendents, and many others.

How can this program be disregarded as not necessary in our state?

How can we abandon our rural communities when they are, when there are funds for this program that will enrich our communities and state as a whole?

>> Renee, I'll start with that, and I can go to Kate's point with regard to to what she said about wanting to get more people to work for universal pre-K will do.

Renee.

And I want to tell you, your listeners this is that at four years old, all children.

No, not just those who are low income or those who come from parents who can afford private school, but all children can start school.

This will free up couples so that they both can go to work.

Kate, and have income bringing in from both families.

It's the ultimate workforce benefit program for our state.

In addition to that, Renee, it gets children in the school earlier, so they learn socialization skills they can start dealing with with reading and phonics, mathematics.

And so they, they get a jump in their learning ability.

And what we've seen, Renee, as I said, from a majority of states already, they already have it.

It's the benefits are significant.

More students graduate from high school.

More students go on to college.

They lead healthier lives.

They're more productive in terms of income.

Kate.

So it's very beneficial for for our state to do this, why we're now in the bottom half of those states that don't have universal pre-K makes no sense.

And our governor has been pushing this program since he came into office.

>> And wasn't there Andrew back in, I can't remember during the seven years when there was an expansion of eligibility for pre-K, where it went from a certain level of poverty to a different level of poverty, and that that was voted on.

>> Yeah, I think there have been some appropriate expansions of it, but I'm more of a policy person than a political person.

But politics obviously plays a big role in this.

And I went back to look at an article that was published December 11th of 2025.

The governor was interviewed by FPL news, and the question was on universal pre-K, and I went back to read it to make sure that I was going to be accurate if this topic came up.

And Governor Beshear said explicitly that he has the support to get universal pre-K through the legislature, it wasn't a question of if they're willing to work with me.

It wasn't a question of, you know, is there enough funding for it?

The governor has a 65%, 70% approval rating.

We hear about it all the time.

That is political capital.

And so the question of why universal pre-K isn't got more momentum behind it.

First of all, I think there are some real questions about whether or not it's the right policy, but the champion of it.

And Reggie, you're right, he has spoken about it publicly.

He's held forums about it.

It seems to me that the people that he talks the least to about it are the members of the legislature.

And so this idea of putting a sufficient or a vast sum of money into the budget for universal pre-K program without passing a bill, go do the work, put that approval rating to work, generate the support for it, work with the legislative branch.

And I think that the question really needs to go back to the first floor, the executive branch of why this issue continues to just wither.

>> So, Senator Mays Bledsoe, have you had conversations or your other members in leadership with the governor about the universal pre-K?

>> I don't think the governor has had a conversation directly with any member of the majority in the legislature about pre-K.

A members of his staff, I think, have reached out, and I've had one of those.

But I think it's disingenuous for the governor to talk about it not being political and then use his Political action campaign committee to send a mailer out in my district.

Julie Raque Adams then three women moms, Louisville Lexington.

Without talking about the actual issue of childcare.

So in pre-K, which we have right now, for those who are low income and have high need, we have pre-K for them that states assisted, but it's half day.

What are the parents supposed to do after an afternoon or on the summertime?

Like this isn't they don't all of a sudden have extra help if we're paying for extra pre-K or pre-K for a little bit, the four year olds without addressing the overall childcare system, which since Covid has been barely hanging on.

And so I think the hesitancy with a $210 million recurring expense is to ensure that the actual childcare system is back to being solid, which I think House Bill six, which Knott the Chamber, but others have all been a part of that conversation, try to stabilize a very fragile environment because if your four year old goes, but your, your five month old who's in daycare now costs five times as much because you've removed the tuition paying members of the four and five year olds, that's a problem for sustainability.

And so it's an overall concern.

My kids went to pre-K.

I'm for it.

I don't think there's many members of the General Assembly who are anti early education investment.

The question is how do we do it?

Well, intentional with stability from the time a working parent may need it until the time they go to school.

>> Representative Bujnowski, have you weigh in here?

>> Yes.

Thank you.

So I did sit in on meetings with the governor and members of the majority party about this topic.

I'm going to tell you, number one, the research is sound, that an investment in early childhood is the best investment we can we can make.

I did have a bill that passed the House.

Hopefully it will get through the Senate about class sizes and caseload caps for special education students, and it was only for K through 12.

And I've heard from multiple preschool teachers about a concern right now about caseloads and capsizes for our preschool program.

So I fully support expanding preschool.

But I think one part of it we need to look at is how is the program that we're providing right now going for children?

If there are 20 children in a room with one teacher and one assistant, and 70 to 90% of them are special needs children, then maybe we need to put a little more effort into, I won't say effort, but address some concerns that we have in our current preschool program.

And that's something I'll be working on over the next year.

>> Any further comment about pre-K for me?

Yes.

Go ahead.

>> I will say this, Kate and Amanda are not wrong when they say that you have to look at early childhood in total.

They're not wrong about that.

Yes, we we do the universal pre-K, but at the same time, we've got to look at our early childhood program and how to make that more affordable to parents as well.

I do agree that that needs some some, some examination, because what happens is from a business model standpoint, Renee, your, your, your, your, your childcare centers get their money primarily from three and four year olds because the teacher to student ratio is a lot higher.

So, so therefore there's more income coming to them.

And, and we got to look at how are we going to pay them more because your childcare workers now, Renee, only make about 15, $17 an hour without any benefits.

And that's got to change.

So I don't I don't disagree with them that responsible leadership here requires that you also take into account how you deal with your early childhood education system.

But but you can do both at the same time.

You know, we do need universal pre-K.

Absolutely.

Everybody's doing it.

Kentucky is falling behind every year, but we do need to look at our early childhood education system.

So I will agree with Kate and Amanda on that point.

>> Jason.

>> Just add that the budget is the most important tool to deal with this entire early childhood issue, whether it's childcare, preschool, and it needs to be, you know, a combination.

And there are some investments that we put in childcare post Covid to keep them up, propped up that are not in this version of the in the versions of the budget that are being negotiated.

So, so the question apparently, you know, we talk about pre-K for all, but the question in this budget is whether we're going to be moving backwards on our funding levels for childcare.

In terms of pre-K, both budgets put pre-K funding at in 2028 at the same dollar amount we put in in 2019, no increase.

So so, you know, this is this is an expensive proposition.

Early childhood education, it costs money and we can pass legislation.

But ultimately, if we don't put dollars behind it, it won't it will not work.

So I think I would love to see more attention given to the budget, you know, levels that are actually in the budget and, and what we risk by not just even continuing what we did last time.

>> Renee can I make one clarification there or just.

Jason makes a great point.

Those funds that were in place during those budgets were federal funds.

Those funds have been exhausted as they were intended to be.

There has not been there was pressure to have the state step up and basically backfill or provide general fund to continue that subsidy.

But again, the federal funds exhausted.

It was a short term measure for a short term crisis.

I'm not saying that it was not an important impact on being able to provide for those providers and those services for families.

But given that those dollars have expired, I think it's a little bit misdirected to suggest that there is some big shortcoming within this budget, because we haven't backfilled those federal funds.

>> Okay, shifting now to transportation.

This is your jam Andrew and House Bill 502 Lexington-Fayette only gets one sixth of transportation funding versus Louisville, yet the GDP of Lexington-Fayette County is only one third of Louisville.

Jefferson.

Why is there such a discrepancy between Jefferson to Fayette from Martin Rivers in Lexington?

Thank you, Mr.

Rivers.

>> Yeah, and Senator Thomas may be able to help on the specifics and Senator Mays Bledsoe, on this question of of Fayette County's allocation.

You know, the fact is, is that this is a work in progress.

There is the funding bill, which I believe is House Bill 501.

House Bill 502 is the road plan.

From what I've been able to discern, more attention has gone into 501 than is necessarily gone into 502 in terms of being able to hash out the differences or the details.

I think it's a good question for anyone to ask if their elected representatives, you know, what can we see in terms of wanting to see some infrastructure improvements within our county?

But I would also defer to our elected officials to discuss that particular question about Fayette County.

>> Madam Vice Chair.

>> I would just say, you know, be mindful that 50% of Fayette County's workforce comes in from outside Fayette County.

So all the surrounding counties, their intersection, their their roadways that come in, all those improvements are very important to the workforce and actually do have kind of a holistic approach to transportation.

You don't stop driving on 60 just because because it goes to Woodford or Fayette.

And so I would be mindful of the whole region of that impact on the on the transportation budget.

We are in the process of that.

I think you will see more investments being made by the time it's all done.

>> Senator Thomas.

>> Senator Bledsoe and I have talked about this.

One thing we do need from a transportation standpoint is we need a new intersection right there where the.

New hospitals, new hospitals are being built.

The UK hospital, the hospital that that's the old Central Baptist Hospital.

They want a new intersection that feeds directly into I-75 right there.

You know, everybody knows Hamburg is growing.

That's that's not a surprise.

And so that's that's one infrastructure need transportation need that we need sooner than later, later.

And mayor, mayor Gordon is very supportive of this.

So yes.

>> In the out years plan.

>> It it is.

And what we're working on right now is trying to finalize some of the ways in which we fund that project.

It is a massive underground tunnel under 75.

As you can imagine, it wasn't ready to put in the house conversation yet.

We are hoping to get to yes on that project, but it is.

It's a very complicated project and it is very, very, very crucial to that side of Lexington.

>> Yeah, Baptist Health, the hospital.

I was thinking about Baptist Health, right?

>> Yes.

Okay.

Thank you, Mr.

Rivers, for for that conversation.

We appreciate that.

So we've talked a little bit about education.

We've talked about social services, Medicaid.

What is missing?

We know that universal pre-K Senator Thomas is missing from the budget.

But where do you hope at the end of the reconciliation process that it that the budget looks like the executive branch budget?

Let's start there first.

>> Well, I'll be brief because I want I want everybody to have, have, have a last some last words.

So I'll just speak in like one minute.

I want to go back to something that, that Jason said, and that's the Medicaid budget.

And I think when we talk to your listeners and viewers, Renee, we need to talk about money.

There is a $800 million State shortfall right now, the Medicaid budget.

What's that translates to, Renee, when you talk about federal matching funds is a $2.7 billion shortfall.

Okay.

That will impact some of your rural hospitals.

There's no question about that.

And unless that's filled, you will see some of these clinics close.

You'll see a few hospitals closed.

You know, we've heard talk about how we have to have a healthy, healthy population to have a healthy workforce.

No one's going to disagree with that.

But if people can't get the kind of care they need because their Medicare has not been funded or they they've been ruled ineligible for Medicare, we're not going to get there.

So that's that's the one thing we really haven't addressed yet.

To answer your question that we need to address, we need to close that $2.7 billion gap.

>> I want to go to Representative Bozinovski for closing thought before we get the rest of the table here in Lexington.

>> Sure.

Yes.

So there are a couple of things that are high on my priority list.

One is the Dolly Parton Imagination Library.

In the Senate version of the bill, the local share has been increased, so the state share is no longer 50%.

It's going down to 33%.

And so there are some concerns that local programs will not be as able to get books into children's hands.

A second concern is that there is in the budget for senior meals, it's 9.6 million and 9.3 million.

I'm not certain if that is the entire budgeted amount, or if that allows for a base of last year's 10 million to get.

The governor's proposal had close to a 20 million ask.

So we don't want to cut senior meals.

That's a priority.

And then the third concern that's come up is in the Senate budget.

Under the education, learning results and services, there's kind of a block grant where a certain amount of money can be spent as chosen as opposed to as designated.

And I am concerned that that might have an impact on our very successful Reed to achieve Reed to succeed programs that the Kentucky Department of Education has implemented to help reading across the state.

So those are those are my priorities that we haven't spoken about yet.

>> Okay.

And so I'm going to let Senator Amanda Mays Bledsoe just kind of chime in on that.

You know, Dolly Parton's name is in the Imagination Library, but there's no slight against Dolly right at all.

>> Against Dolly.

I'm a big fan, and we did keep the amount of funding.

They haven't spent all the money they were allocated in the last budget.

They don't have.

They have a reserve.

And I think the idea was if local groups are doing a lot of fundraising, maybe if they have more impetus or more excitement around it, they would raise some more money and that would help get more people in the program.

>> But we've also heard from counties like McCreary County who are very concerned about getting less money.

>> That wasn't my favorite part of the structure.

It's probably something that we'll continue to talk about, but I'm really glad she brought up to succeed.

You know, one of the things we talk about in SEEK is what's not in SEEK.

All the health care benefits for for teachers, all the pension benefits, all the Reed to succeed the math nation, Friskies, all the support services that are in the last funding, which you mentioned, which is over $200 million, which is all education focused, every dollar of it, which doesn't show up in the SEEK formula, but actually shows up in that, not to mention our the charter programs like.

And now I'm missing the names at EKU at the program there, as well as the ones the model.

Thank you.

And I'm thinking of the, the craft Academy and those which are all additional education programs that don't show up in SEEK and, and just on the Medicaid piece, just so we can hit on it a little bit, I hope we hit dental.

That's an area that I know we've heard a lot of in the last couple of years that will not having those reimbursements is really having some difficulty with being able to provide dental services.

But, you know, 1 in 3 Kentuckians on Medicaid, every 50% of every birth in the state is on Medicaid.

It's unsustainable for us to continue on that path.

Not to mention that many of the plans are actually better than private plans.

And so it's an area that, to Kate's point, is not going away.

We are going to have to figure out a way to provide services and health care the most effective, efficient way possible and providing really good care for Kentucky's most vulnerable.

That has to be that's certainly the intent, I think, of the General Assembly is the most vulnerable to have that care and providing a balance and a structure that will continue to do government services well and allowing some to growth in the economy is really, really important.

>> Kate.

>> Child care, that's our top issue passed those bills.

There's there's bills in the House.

We support bills in the Senate.

We support great legislation.

So we want to see that get across the finish line.

And of course, the budget funding those bills and the budget.

It's also very important, including the Child Care Assistance Program and the Employee Childcare Assistance Program, which is a wonderful bridge to help people off of public assistance.

It's a public private partnership, and we want to continue that program and see that funding in the budget.

And then from there, of course, infrastructure, those one time spends potentially in House Bill 900, build more infrastructure.

It's the foundation of our economy.

>> Yeah, we didn't really talk about that.

But we will.

We'll get around to House Bill 900 Jason.

I'll give you about 45 seconds, sir.

>> The the $2.7 billion shortfall in Medicaid is the biggest is, I think, the single biggest issue.

You know, we talked a little bit about the impact on on rural hospitals, but almost the entire job growth in the American economy and in Kentucky over the last year has been in health care.

We have an aging population.

We have more people going into nursing homes, more people going into home care services.

That's one of the fastest growing types of jobs.

We cannot cut this program and just give up federal money without severe consequences.

So there's the economic impact, but there's also the impact on people.

The governors, the administration will have to cut what's quote unquote optional services in Medicaid.

Well, those optional services are things like waiver programs that serve people with disabilities.

There are things like community mental health centers that provide drug treatment and and mental health services.

Hospice is a optional program.

Dialysis is an optional program, home delivered meals, certain types of drug treatment, etc.

So that to me is is the single biggest issue that we face.

>> Okay.

Sorry, Andrew, we have to have you back so you can get the last word next time.

Okay.

>> Transparency.

We need more transparency in the process.

>> More transparency in the process.

Okay.

We'll have to have you back to follow up on that.

And we thank you so much for being with us tonight on Kentucky.

Tonight, we'll talk more about the General Assembly next Monday night as it wraps up and of course, Kentucky edition each weeknight at 630 eastern, 530 central.

We explore all that's happening in your state Capitol.

I'm Renee Shaw.

Take good care and I'll see you tomorrow night.

Fast.

>> High times are gonna come on the show.

>> Well, see, we.