Gov. Beshear shares economic milestones, budget proposals

Governor Andy Beshear spotlighted this year’s economic milestones and shared some of his budget proposals for the upcoming legislative session at his final Team Kentucky Update of 2025 on Thursday.

Beshear says 2025 was Kentucky’s second-best year for private sector investments in state history. During the year, he says 184 new economic projects and expansions were announced, which come with investments totaling $10.5 billion and over 9,500 new jobs.

Turning toward next year’s legislative session, lawmakers will be tasked with creating a two-year state spending plan, and Beshear shared some of his budget suggestions. In the past, Beshear has said the state was projected to have a revenue shortfall of $305 million; however, this shortfall was recently reduced to $156 million by the Consensus Forecasting Group.

As a result of the shortfall, Beshear says a budget reduction is necessary. To help meet the reduction, Beshear says for the executive branch, he plans to reduce general fund appropriations by around $77 million, and for many agencies, this will result in a 3% total budget reduction.

Beshear says most agencies reducing their budget by retaining vacancy credits for jobs that have been budgeted for, but remain empty. He says the auditor’s office and the treasurer’s office have been asked to take part in the budget reduction, but those officials have said no.

Despite the shortfall, Beshear says public education, post-secondary education, Medicaid, and public safety are among the sectors that will face no funding reductions.

Beshear will talk more about his proposed budget at his State of the Commonwealth Address on January 7.