Louisville, Kentucky, December 19, 2025
Governor Andy Beshear of Kentucky has unveiled a plan to tackle a $156 million budget shortfall while ensuring that crucial services such as education, Medicaid, and public safety remain funded. The initial deficit was reduced from $305 million due to increased state revenues. The strategy includes a 3% budget cut for state agencies through unfilled vacancies, reserving cuts primarily for non-essential services. Key exemption areas from cuts involve education and safety services as the state approaches a new budget session in January.
Louisville, Kentucky
Governor Andy Beshear has announced a plan to address a $156 million budget shortfall without cutting funding for schools, Medicaid, or public safety services.
The shortfall, initially projected at $305 million, was revised downward due to stronger-than-expected state revenues over the past three months. To manage the remaining deficit, the governor has proposed a 3% budget reduction for most state agencies, primarily achieved by not filling vacant positions rather than cutting programs or laying off workers. This approach aims to minimize the impact on essential services while balancing the budget.
Key areas exempt from these cuts include K-12 education, higher education, pension funding for state employees and educators, and public safety services such as the Kentucky State Police and the Department of Juvenile Justice. The plan also involves utilizing approximately $28 million in unbudgeted funds to help cover the shortfall.
Governor Beshear emphasized that these measures are designed to ensure that necessary services continue without disruption. He stated that the state is committed to managing the shortfall responsibly while maintaining support for Kentuckians, with priorities including education funding, Medicaid, pension funding for educators and state employees, and public safety.
The Kentucky legislature is expected to pass a new two-year budget during the upcoming legislative session starting in January. The governor’s office has indicated that services for Kentuckians will continue without disruption during this period.
Key Features of Kentucky’s Budget Management Plan
| Feature | Description |
|---|---|
| Budget Shortfall | $156 million |
| Proposed Agency Budget Reduction | 3% reduction, primarily through unfilled vacancies |
| Exempted Areas from Cuts | K-12 education, higher education, pension funding, public safety services |
| Utilization of Unbudgeted Funds | Approximately $28 million to help cover the shortfall |
| Legislative Session | New two-year budget expected to be passed in January |
Frequently Asked Questions (FAQ)
What is the current budget shortfall in Kentucky?
Governor Andy Beshear has announced a plan to address a $156 million budget shortfall without cutting funding for schools, Medicaid, or public safety services.
How does the state plan to manage the budget shortfall?
To manage the remaining deficit, the governor has proposed a 3% budget reduction for most state agencies, primarily achieved by not filling vacant positions rather than cutting programs or laying off workers. This approach aims to minimize the impact on essential services while balancing the budget.
Which areas are exempt from the proposed budget cuts?
Key areas exempt from these cuts include K-12 education, higher education, pension funding for state employees and educators, and public safety services such as the Kentucky State Police and the Department of Juvenile Justice. The plan also involves utilizing approximately $28 million in unbudgeted funds to help cover the shortfall.
What is the expected timeline for addressing the budget shortfall?
The Kentucky legislature is expected to pass a new two-year budget during the upcoming legislative session starting in January. The governor’s office has indicated that services for Kentuckians will continue without disruption during this period.
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