LEXINGTON, Ky. — The GOP-controlled Kentucky legislature gave final passage Wednesday to the state's executive branch budget allocating more than $31 billion in General Fund revenues, sparking heated debate between Republicans and Democrats over spending priorities for education, Medicaid and government operations.

Republicans voted 73-21 in the House to send House Bill 500 to Democratic Gov. Andy Beshear, while the Senate passed the budget unanimously 38-0.

The budget became the focal point of partisan clashes over education funding. The final version increased K-12 per-pupil spending by about 2.7% on average over the next two years, but education funding still falls short of what Beshear had proposed. The budget also does not include the governor's call to fund universal preschool for 4-year-olds.

House Republicans championed their approach as fiscal restraint. "To restrain the growth of spending is not a cut," said House Appropriations and Revenue Committee Chair Jason Petrie, R-Elkton. But Democrats called the finalized budget morally and fiscally short-sighted.

Medicaid emerged as the most contentious issue. An analysis by the Kentucky Center for Economic Policy concluded that Medicaid funding in the legislature's budget falls $691 million short of what Beshear had recommended. House Minority Floor Leader Pamela Stevenson, D-Louisville, lambasted Republicans for putting Kentuckians' health at risk by underfunding Medicaid, saying "We have the money, we have the data, and we are refusing to act."

House Speaker Pro Tem David Meade, R-Stanford, defended the Medicaid cuts, arguing that the Beshear administration requested an "astronomical amount for Medicaid" without proper legislative approval.

Jason Bailey, executive director of the Kentucky Center for Economic Policy, said that "years of tax cuts" by the legislature "have already resulted in revenue that is too low to truly move Kentucky forward." Republicans aim to eventually eliminate the state's individual income tax.

The legislature also approved $1.7 billion in one-time appropriations from the Budget Reserve Trust Fund, allocating funds for drinking water and wastewater projects, airport renovations and economic development. The funding package allocates $1.5 million to Lexington Fayette Urban County Government in fiscal year 2027-28 to fund a scholarship through the Ed Brown Society.