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Public Policy: Bluegrass Budget Blitz

Kentucky’s biennial spending plan fast-tracks progress

By Bob Babbage and Rebecca Hartsough

The dust has settled in Frankfort legislative session, with the General Assembly delivering a long list of policy objectives, most notably the two-year budget.

The spending plan includes billions in one-time investments for economic development, infrastructure, education, health and workforce initiatives across the state. The House and Senate pulled an unprecedented $2.7 billion from the budget reserve trust fund—aka the rainy-day fund—to support major regional and local projects.

The Republican supermajorities made efforts to ensure the two-year spending plan keeps the state on track to meet the necessary triggers at year-end for state income tax eductions, the GOP’s primary economic policy objective. Financial forecasts project that state revenues and the rainy-day fund balance will enable another reduction from the current 4% rate to 3.5% in the next year.

Below is a compilation of the 2024 session budget highlights:


  • • Mega-Development Projects
    Allocating $100 million in support of approved projects exceeding $10 million.
  • • Kentucky Product Development Initiative
    $70 million for economic development site projects.
  • • GRANT Program
    $200 million to cover local matches for counties, cities and nonprofits seeking federal grants
  • Downtown Louisville
    $100 million for downtown Louisville revitalization projects.
  • Shelby County
    $25 million for an energy development project (approval pending by 2025 General Assembly).
  • Hardin and Warren Counties
  • $50 million to the Kentucky Economic Development Finance Authority Loan Pool to support economic development in Hardin and Warren counties as a result of mega projects. The funds will go toward critical infrastructure improvements, such as water and sewer requirements.
  •  Clay County
    $10 million to Clay County for economic development projects in the area.
  • Ashland Conference Center  $25 million to the City of Ashland for construction of a new conference center complex.
  •  Frankfort Convention Center
    $11.25 million for the City of Frankfort to support construction of its new convention center.


  • K-12 Funding
    The state’s primary K-12 funding mechanism, known as the SEEK formula, receives a 3%increase in the first year and a 6% increase in the second year. The budget also funds student transportation costs at 90% in the first year and 100% in the second year.
  • University of Kentucky
    $40 million to bolster the Center for Applied Energy Research, support the Kentucky Nuclear Energy Development Authority, and strengthen the Energy Planning and Inventory Commission; $11 million annually to the Kentucky Cattleman’s Association for the construction of a Livestock Innovation Center at the University of Kentucky C. Oran Little Research Farm.
  • University of Louisville
    $20 million to support construction, renovation and operations for the university’s cybersecurity program; $10.6 million for the Kentucky Manufacturing Extension Partnership; $25 million to support cancer care, research, screening and educational programs at the Center for Rural Cancer Education and Research.
  • Eastern Kentucky University $25 million to support the aviation program.
  • Morehead State University $2.5 million dedicated for new space science satellites for the university’s space science program.
  • Murray State University
    $60 million to construct a facility for the veterinary technician program; $10 million in fiscal year for construction and renovation for the cybersecurity program.
  • Western Kentucky University $20 million for the university’s Innovation Campus program;$4.4 million for the LifeWorks Transition Academy and Bridge Program.
  • Commonwealth Center for Biomedical Excellence
    $125 million for the construction of a Commonwealth Center for Biomedical Excellence in the City of Covington in partnership with Northern Kentucky University and the University of Kentucky. The center is slated to house a new home for Northern Kentucky University’s Chase College of Law as well as a facility for the UK College of Medicine.


  • Rail Improvement and Development
    $15 million in grants to improve and modernize Kentucky’s rail systems; $15 million for projects that improve connectivity and rail services.
  • Airports
    $2.5 million for Barkley Regional Airport (PAH); $5 million for Blue Grass Airport (LEX); $20 million for Cincinnati/Northern Kentucky International Airport (CVG); $5 million for Louisville Muhammad Ali International Airport (SDF); $2.5 million for Owensboro Daviess County Regional Airport (OWB); $10 million for the Leitchfield-Grayson County Airport to purchase acreage for the expansion of runways to promote economic growth.
  • Riverports
    $15 million for improvements and modernization of public riverports; $3.5 million to the Paducah-McCracken Riverport for the Riverport West project;$1.3 million to the Owensboro Riverport Authority for the construction of the riverport waterline loop.


  • Kentucky Water and Wastewater Assistance
    $150 million for troubled or economically restrained water and wastewater systems (WWATERS Program).


  • Kentucky Rural Housing Trust Fund
    $10 million for housing development.
  • $10 million to Lexington Housing Affordability for transformational housing affordability partnership.


  • Middlesboro Cancer Treatment Center
    $12 million to Appalachian Regional Healthcare for construction of a cancer treatment center in the City of Middlesboro.
  • Pikeville Medical Center
    $12 million to Pikeville Medical Center for facility upgrades, including the obstetrics, labor/delivery ward and operating rooms, intensive care unit, and psychiatric/mental health ward.
  • Regional Substance Use Disorder Pilot
    $20 million to the Barren River Area Development District to develop and implement a regional substance-use disorder services pilot program.
  • Kosair for Kids
    $30 million to the Home of the Innocents for the expansion of the Kosair for Kids Complex Care Center.

Bob Babbage and Rebecca Hartsough are with Babbage Cofounder, a leading government relations firm.