Kentucky House GOP Budget Increases Education Spending, Fixes Insurance Issue

The new budget proposal addresses concerns over education funding and state employee health insurance.

Published on Feb. 25, 2026

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The Kentucky House Republicans have unveiled a new version of the state's biennial budget bill that increases education spending and fixes an issue with the Kentucky Employee Health Insurance plan. The budget proposal allocates about $1.17 billion more from the General Fund compared to the initial draft, with increases in funding for the SEEK education formula and school transportation. The new version also removes a proposed 5% cap on employer health plan contributions that could have led to higher premiums or reduced benefits for state employees.

Why it matters

The budget is a crucial piece of legislation that determines spending for all facets of the state's executive branch over the next two fiscal years. The changes to education funding and the state employee health insurance plan address concerns that were raised about the initial draft of the budget bill.

The details

The new version of House Bill 500 increases SEEK per-pupil funding to $4,626 for fiscal year 2026-2027 and $4,792 for fiscal year 2027-2028, up from the $4,586 per-student spending that was proposed in the initial draft. It also restores school transportation funding to the current level of $399 million per fiscal year, after the first draft had proposed a $40 million decrease. Additionally, the new budget removes language that would have capped employer health plan contributions at a 5% increase per year, which could have led to higher premiums or reduced benefits for the 310,000 members of the Kentucky Employee Health Insurance plan.

  • House Appropriations and Revenue Chair Jason Petrie unveiled the committee substitute for House Bill 500 on Wednesday, February 25, 2026.
  • The new version of the budget bill is expected to pass the House by the end of this week.

The players

Jason Petrie

Republican chair of the House Appropriations and Revenue Committee, who unveiled the new version of the budget bill.

David Osborne

Republican Speaker of the Kentucky House of Representatives.

Robert Stivers

Republican President of the Kentucky Senate.

Andy Beshear

Democratic Governor of Kentucky.

Mary Elizabeth Bailey

Secretary of the Kentucky Personnel Cabinet.

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What they’re saying

“After adjusting for inflation, it will fall 29% below 2008 levels. Let that sink in: We are funding Kentucky's children at a lower rate in real dollars than we did nearly 20 years ago, and it gets worse.”

— Jessica Hiler, Kentucky Education Association vice president (kentucky.com)

“If the General Assembly passes this proposed change, it will have a devastating impact on all Kentucky Employee Health Plan (KEHP) members and their dependents, resulting in a possible 78% increase in employee premiums over the two years.”

— Mary Elizabeth Bailey, Secretary of the Kentucky Personnel Cabinet (kentucky.com)

What’s next

The new version of House Bill 500 is expected to pass the Kentucky House by the end of this week. It will then move to the Senate for consideration, where lawmakers will have the opportunity to make further changes before the budget is finalized.

The takeaway

The updated Kentucky House GOP budget proposal addresses key concerns raised about the initial draft, including increasing education funding and fixing an issue with the state employee health insurance plan. These changes demonstrate the legislative process at work as lawmakers work to craft a budget that meets the needs of Kentuckians.