LEXINGTON, Ky. — The Kentucky General Assembly passed a $31 billion two-year state budget on April 1, sending House Bill 500 to Gov. Andy Beshear's desk after weeks of contentious negotiations over education, healthcare and spending priorities.

The budget, which takes effect July 1, represents a compromise between the GOP-controlled House and Senate and includes approximately $500 million more in spending than the previous two-year budget. However, it falls short of several gubernatorial priorities and sparked heated debate on the House floor.

The measure increases per-pupil funding through the Support Education Excellence in Kentucky program by 2 percent over the biennium, providing $4,626 per student in fiscal year 2026-2027 and $4,792 in 2027-2028. The budget totals over $7 billion in SEEK funding from the state's general fund. Yet Democratic Rep. Chad Aull of Lexington argued the increase remains insufficient, noting that Kentucky ranks 48th nationally in starting teacher pay at roughly $40,000 annually, compared to $50,000 in West Virginia and $55,000 in Tennessee.

The budget rejected Beshear's request for $159 million in educator raises and universal pre-K for 4-year-olds, instead scrapping a proposed "13th check" for state retirees. However, it does restore funding for the Dolly Parton Imagination Library program and allocates $44 million toward foster care services.

Medicaid receives $6.2 billion in general fund spending over the biennium, along with an additional $290 million "lockbox" requiring legislative approval before access. The budget also sets aside roughly $350 million for the state's "rainy day" trust fund and approves $1.7 billion in one-time spending from reserve funds for infrastructure, economic development and regional projects, including $90 million for downtown Louisville revitalization.

The Senate passed the budget unanimously 38-0, while the House approved it 73-21 after Republicans ended debate Wednesday evening. House budget committee chair Jason Petrie, R-Elkton, defended the plan as "disciplined fiscal management," arguing that "restraining the growth in spending is not a cut." The budget cuts base funding for most state agencies by 7 percent over the biennium, though juvenile justice, some universities and pension systems are exempt.

Beshear has two weeks to issue any line-item vetoes before lawmakers return to the Capitol on April 14 for a two-day veto override period. Republicans hold supermajorities in both chambers, making any veto override likely.