Kentucky’s recent credit rating upgrade to Aa2 from Aa3 is more than a financial milestone—it reflects disciplined fiscal policies and responsible governance championed by Republican supermajorities in the General Assembly. Better bond ratings keep borrowing costs lower.
Despite claims to the contrary, Governor Andy Beshear’s attempts to take credit for these improvements overlook the critical role conservative leadership has played in reshaping the state’s economy. Kentucky’s Constitution clarifies that the power to raise and expend revenue is exclusively that of your legislature, not the governor.
Over the past eight years, Republican lawmakers have steered Kentucky toward stability and growth through forward-thinking reforms. From fully funding pension obligations to maintaining a robust budget reserve, and cutting taxes responsibly, our leadership has ensured Kentucky’s financial house is in order. These gains result from intentional policies designed to lift the burden on taxpayers and ensure fiscal health.
Moody’s upgrade of Kentucky’s credit rating to Aa2 endorses the fiscal responsibility Republicans have brought to the state. Moody’s cited several reasons for the upgrade, all aligned with conservative policies enacted by the General Assembly:
▪ Fully funded pensions: We reversed the imbalances plaguing the system under previous administrations by ensuring pension obligations were met.
▪ Balanced budgets: Republicans prioritized balanced budgets, avoiding short-term fixes that lead to instability.
▪ A sizable rainy day fund: The budget reserve, once depleted, now sits at historic levels, safeguarding against future uncertainties.
These outcomes result from careful planning, disciplined spending, and respect for taxpayer dollars.
These policies have proven their worth. Kentucky has seen three consecutive credit rating upgrades and budget surpluses in just a few years. Moody highlighted Kentucky’s tourism growth as a credit-positive attribute for the first time, reflecting the transformational funding invested in that sector.
For nearly a century, Democrats presided over financial mismanagement:
▪ Pension systems were depleted: Pension funds were left underfunded, jeopardizing retirement security.
▪ Tax-and-spend policies: Tax policies stifled the economy, burdening families and businesses.
▪ No budget reserves: The Budget Reserve Trust Fund was virtually empty, leaving the state unprepared for downturns.
Gov. Beshear has consistently opposed Republican reforms, vetoing nearly 100 bills, including House Bill 8, which facilitated income tax reductions. Kentucky would not enjoy its current financial health if his vetoes were upheld. According to the constitution, managing the budget is our job. The Governor can only spend what we give him. This legislature crafted and delivered the budget, resulting in our improved credit rating.
Republican lawmakers have worked to ease the tax burden. Since taking control, the income tax rate has been reduced from 6 percent to 4 percent, with further reductions planned.
Critics claim tax cuts will harm essential services, yet Kentucky has maintained funding for education, infrastructure, and public services while achieving budget surpluses under our leadership.
As Kentucky moves forward, the Republican supermajorities remain committed to policies prioritizing fiscal responsibility, economic growth, and financial stability. Improvements in bond ratings, growing reserves, and continued income tax reductions result from strategic policymaking and conservative principles.
With Kentucky’s financial house now in order, we are well-positioned to meet future challenges. We hope that future executive leadership will embrace, rather than oppose, the policies that have proven effective in strengthening Kentucky’s economy.
Senator Robert Stivers has been the Senate President since 2013 and Sen. Chris McDaniel is the Appropriations & Revenue Chair.
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