FRANKFORT — An extra payment for state retirees and a decrease in school transportation funding are among the changes the Senate has introduced in its version of the state budget.
The House passed its version of the budget in early February. The Senate on Wednesday passed its budget bills nearly unanimously after a short debate.
There’s still a long way to go before the budget is finalized. Now the House and Senate must come to an agreement about it, a process that’s likely to take place in a conference committee.
Here are three key differences between the two chambers’ spending plans for the next two years:
Money for state retirees
State retirees will have some good news coming their way if the Senate gets its way.
State retirees, who have not had a pension cost-of-living increase since 2011, will get a one-time additional payment, which many call a “13th check.”
The extra payment for Kentucky Employee Retirement System and State Police pension members will vary depending on how long a person has been retired and their typical pension amount, with the highest amount going to those who draw the smallest checks, said Senate budget chairman Chris McDaniel, R-Ryland Heights.
Gov. Andy Beshear had requested a 13th check in his version of the budget, but the extra payment did not make it into the House budget. In February, state retirees rallied in Frankfort to urge lawmakers to add that additional check.
The Senate budget includes a slightly smaller pay raise for state employees differently than the House did.
The Senate budget includes 2.6% pay raises for the next two fiscal years, while the House budget proposed a 4% raise in fiscal 2025 followed by a 2% raise in fiscal 2026. The Senate pegs the raises to a federal inflation measure, McDaniel said.
Education spending
The Senate K-12 education budget largely mirrors the House version but would send less money to districts to pay for school transportation.
School district transportation costs are calculated according to a complex, per-pupil formula.
The Senate budget would pay for 80% of districts’ transportation costs next year and max out at 90% in fiscal 2026. The House wants to fund school transportation at 100% starting in fiscal 2026.
“We’re taking responsible steps to get to full funding,” McDaniel said about the difference between the two chambers.
Otherwise, the two chambers’ versions of the K-12 education budget are similar.
The chambers so far agree on increases to SEEK, the per-pupil education funding formula.
As in the House budget, the Senate budget provides a 4% increase in per-pupil funding in fiscal 2025 and a 2% increase in fiscal 2026.
The Senate would also increase SEEK funding for districts with lower property assessments, so-called Tier 1 districts, which would not include Jefferson or Fayette counties.
But that leaves out an across-the-board pay raise for teachers and other school employees, which Beshear had wanted.
GOP leaders have said that school districts can use the additional SEEK funding to increase employee pay if they decide that’s the best use of the money.
“We think it’s important that the funding flow through the SEEK formula. It is the constitutionally governed funding formula,” McDaniel said about that decision.
What’s in it for Louisville?
The Senate budget also includes some goodies for Louisville, including $100 million over the next two years for what budget chair McDaniel called “urban redevelopment projects.” That funding was not included in the House version of the budget.
Mayor Craig Greenberg had originally requested $250 million from the legislature for infrastructure and other projects.
The $100 million in the Senate budget would be earmarked for Belvedere, the Community Care campus, the LOUMED campus, the Louisville Gardens project, a downtown vacant lot revitalization and the Butchertown Sports District.
The Senate’s budget also includes a one-time payment of $5 million for improvements at the Louisville Muhammad Ali International Airport.
The University of Louisville would also get $25 million to help build a cancer center in Bullitt County, as well as $20 million for a cybersecurity partnership with Murray State University.
Reach Rebecca Grapevine at [email protected] or follow her on X, formerly known as Twitter, at @RebGrapevine.