Frankfort’s political dynamics tend to be rendered as clashes between our Democratic governor and the Republican General Assembly and the policy disagreements that define their competing visions for the state. When it comes to the process, much of what happens doesn’t warrant attention.
There are moments, however, when a procedural change shifts the capital’s power structure in a far more meaningful way than who’s up and who’s down. One of those changes happened four years ago and continues to reverberate today.
In 2021, Rep. Jason Petrie, R-Elkton, became only the second Republican to chair the House Appropriations and Revenue Committee in the last 100 years. The following year, Petrie upended the status quo by filing the House’s budget bill a week before Gov. Andy Beshear could present his spending plan on statewide television.
Beshear and his allies cried foul, saying the House had violated “long-standing traditions.” Which was true. Historically, the governor’s recommendation was the starting point for the months-long process of crafting the state budget.
Petrie repeated the move in 2024, and there’s no reason to think the House will cede this advantage when the General Assembly convenes in January. That chamber has sidelined the executive branch and now controls the opening bid of Frankfort’s most far-reaching policy document.
Over the past few months, the message coming from Beshear’s office has been that the next budget is going to be tight. Revenue growth is expected to be sluggish at best, and the governor’s team is preparing for a $305 million shortfall in the current year.
Donald Trump’s “big beautiful bill” shifted more responsibility for the administration of Medicaid and food stamps to the states. Sen. Chris McDaniel, R-Ryland Heights, the chair of the Kentucky Senate Appropriations and Revenue Committee, recently shared that the increased costs to administer the food stamp program “would amount to an immediate $180 million ‘hit’ to the state budget.” That’s a significant, but not insurmountable, amount.
In previous downturns, Frankfort would raise taxes to make ends meet. Entering this biennium, Kentucky has substantial budget reserves to meet any serious shortfalls. These savings for a rainy day are there because Republicans chose not to spend every dollar available. That decision is being vindicated as we enter a period of belt-tightening.
The appetite for more spending never takes a year off. The executive and judicial branches have submitted requests totaling $5.8 billion in new general fund appropriations over the next two years. Most of it comes from wish lists that the agencies know won’t get funded. It does raise the question of whether the bureaucracy got Beshear’s memo that there isn’t going to be a lot of new money to go around.
I wanted to know what principles are shaping the House Republicans’ approach to their budget. I posed the question to their communications office, which provided a statement for this column: “We’ll carefully evaluate any budget requests, prioritize smart investments and make decisions that reflect our long-term vision for Kentucky.”
One priority, according to the statement, is “ensuring every taxpayer dollar works as hard as the people who earned it … (by) pushing state agencies to operate more efficiently, stretch resources further and deliver better results.”
In early January, we’ll know how well their proposal reflects their principles. Jason Petrie’s budget-hawk credentials are well established. I expect his spending plan will meet the moment that calls for even greater fiscal discipline while allowing for investments that have significant upside to the state’s economy and quality of life.
The big unknown going into the session is what the Republicans will do with the state income tax. House Majority Whip Jason Nemes, R-Middletown, is aggressively pushing for another reduction in the tax rate, which is already set to drop to 3.5% in 2026. Initiating the debate out in the open is promising. Kentuckians deserve to hear the pros and cons of the issue so they can decide for themselves what’s best for their families and communities.
Whatever the outcome, the General Assembly is in the driver’s seat. Legislative independence took decades to arrive. When they’re in session, it’s nearly absolute.
Andrew McNeill is the president and senior policy fellow at the Kentucky Forum for Rights, Economics and Education (KYFREE). He served as the Deputy State Budget and Policy Director in Gov. Matt Bevin’s administration. His email address is amcneill@kyfree.org.