Budget surplus: Kentucky on track for 4th consecutive year over $1 billion

FRANKFORT – Kentucky’s pot of surplus money keeps growing.

According to a 2024 fiscal year revenue report, the commonwealth is on track for a fourth consecutive year of an over-$1 billion budget surplus.

Gov. Andy Beshear shared the news Thursday at his weekly presser.

“This administration has now had the four largest budget surpluses in Kentucky’s history,” he said.

The report, produced by State Budget Director John Hicks, includes a 2.8% increase in General Fund receipts and a 6.9% increase in Road Fund receipts, compared to the 2023 fiscal year.

Hicks highlighted the “emergence of investment income as a significant General Fund revenue source” in the report. Higher investable balances and favorable rates of return have doubled investment income revenue from $150 million to $300 million in two years.

“By way of comparison, for the ten-year period from FY13 until FY22, investment income averaged negative $2.4 million annually,” Hicks wrote.

Beshear said the driving force behind the surplus goes beyond Kentucky’s plethora of recent groundbreakings and economic development announcements. He said increased wages and salaries throughout the state have helped, even when the income tax rate has dropped to four percent.

“At a time when a lot of our country is gripped by pessimism, what I’m seeing across Kentucky for people of all parties is an optimism we ought to embrace,” Beshear said.

“But we ought to recognize that, not knowing how long this window will be open, we got to sprint as hard as we can forward – not right, not left, but forward – to achieve as much as we can for our people.”

Republicans react to budget surplus

Shortly after Beshear’s announcement, members of the legislature’s Republican supermajority took credit for the economic growth.

Senate Budget Chair Chris McDaniel, R-Ryland Heights, said he wasn’t surprised that fiscally responsible, conservative policies created since 2017, when Republicans gained a majority in both chambers, have led to economic success.

McDaniel thanked his colleagues for ending “the long and failed tradition of a tax-and-spend approach to governing that Frankfort was so accustomed to for decades.”

“The legislature has withstood progressive and executive branch pressures to blow through budget reserves, and we have successfully overridden gubernatorial vetoes aimed at stopping common sense legislation, while remaining steadfast in our goal of fiscal restraint,” McDaniel said.

He took aim at the Beshear administration, who Republican legislators have accused of taking too much credit for the fruits of their labor.

“We can only hope the naysayers, who find it so easy to spend other people’s money, will support these proven conservative initiatives in the future, especially if they plan to continue taking victory laps upon seeing the results,” McDaniel said.

House Appropriations and Revenue Chair Jason Petrie, R-Elkton, called the news an “undeniable result” of the legislature’s work to “craft responsible spending plans, lower taxes, invest in the people of Kentucky, and place a historic amount of money in our budget reserve.”

“This unfailing commitment to acting as stewards of taxpayer dollars provided the opportunity to invest more than $2.7 billion over the next two years to improve road, rail, river, air, and water infrastructure,” Petrie said. “As well as make targeted investments in school facilities, public pensions, tourism, and community development.”