Every two years, the Kentucky General Assembly passes a budget in the form of four separate bills for the executive branch, legislative branch, judicial branch and the Transportation Cabinet (because of COVID-19, the General Assembly passed a one-year budget in both 2020 and 2021). This budget establishes how the state will invest in education, health, transportation, public safety, human services and other areas that help build a strong state economy. However, the budget is only half of the picture: Equally important in building a strong state economy are the revenues that pay for these investments. Although there are many players involved in the process, the ultimate constitutional responsibility for both raising revenues and appropriating funds rests with the General Assembly. In fulfilling these two responsibilities, the General Assembly establishes the blueprint for Kentucky — who we are, what we value, what we aspire to be, and how and whether our communities prosper and flourish. The budget is the primary policy document of the commonwealth, and revenues provide the means by which those policies are carried out.
This primer provides a basic, high-level overview of how the budget is developed, considered, and enacted, and where the resources that support it come from. The primer also examines Kentucky’s fiscal health and makes the case that Kentucky gives too much tax revenue away through tax expenditures, making it harder to fund the high quality public services that are needed to make Kentucky a good place to live and work for all families; that empower homegrown entrepreneurs; and attract people to our state. This failure to invest in the public good especially harms Black and brown Kentucky families, people with low incomes, economically distressed communities, and other groups that are systematically prevented from being able to afford private alternatives.
The ultimate goal of this primer is to explain why we should care about our state budget. It is a powerful document, backed by the force of law. Along with the revenues that support it, the budget represents the primary way our lawmakers carry out their charge to invest responsibly and build shared prosperity. By understanding the basics, we can be better advocates for a healthy budget supported by revenues sufficient to provide the programs and services we all want and need to grow and prosper as a state.
The full KyPolicy budget primer is available as a PDF here.