BY REPRESENTATIVE BOBBY MCCOOL

The Appropriations and Revenue Committee is one of the most influential committees in the legislature because it oversees how state funds are raised and spent. Every budget, tax policy, and major financial decision must pass through this committee, making it central to setting the state’s priorities and ensuring fiscal responsibility. Its work affects every aspect of state government, from education and public safety to infrastructure and healthcare, because funding ultimately determines which programs can be supported. By carefully reviewing revenue projections and balancing needs with available resources, the committee helps maintain a sustainable financial path for the state. Since becoming the majority in 2016, conservatives in the Kentucky House have adopted responsible budget philosophies that focus on meeting the state’s needs and investing with an eye towards benefiting every Kentuckian. After all, these are resources that belong to you, the people of Kentucky. As elected officials, we are just stewards of the public’s resources.

Here are a few of the measures approved by the Appropriations and Revenue Committee that made their way into law during the 2025 Regular Session:

Cutting the State Income Tax on Working Kentuckians – HB 1 lowers the state’s individual income tax to 3.5% as of January 2026, leaving approximately $718 million in the pockets of Kentucky taxpayers in the first fiscal year of full implementation.

Addressing Improper Sales Tax Collection – HB 2 provides Kentuckians improperly charged sales and use taxes on bullion transactions, such as gold and silver, an avenue to seek refunds and additional compensation for the illegal and undue burden. Vetoed and Overridden.

Expanding Funding Opportunities for Ambulance Providers – HB 152 allows eligible public ground ambulance providers to receive additional federal funding for transporting Medicaid patients by creating a voluntary Medicaid supplemental payment program for public ground ambulance providers.

Ensuring Proper Use of Opioid Settlement Funds – HB 537 strengthens oversight of the Opioid Abatement Trust Fund, ensuring that financial resources are directed toward evidence-based treatment, recovery services, crisis intervention, and other programs that provide real solutions for those struggling with addiction. Under the measure, recipients of these funds must adhere to strict reporting requirements, increasing transparency and preventing misuse.

Providing Disaster Relief – HB 544 establishes the State Aid Funding for Emergencies (SAFE) 4860 Fund to assist communities impacted by the severe storms, straight-line winds, flooding, and landslides that began on Feb. 14, 2025.

Paying Outstanding Claims – HB 545 authorizes the payment of certain outstanding claims against the Commonwealth that had been audited and approved but remained unpaid due to issues like lapsing appropriations or missing procurement documentation.

Making Infrastructure a Priority – HB 546 creates the Local Access Road Program to replace the County Priority Projects Program, implementing the same application process, but requiring a 10 to 20% match based on the same population rankings established for the Kentucky Product Development Initiative. The measure also includes language requiring the Transportation Cabinet to enter into a MOU with Indiana to use tolling revenues to finance the I-69 Ohio River Crossing Project and makes a $150 million GARVEE bond budgeted for in FY 2026 contingent on tolling. Emergency.

Increasing Access to GRANT Program Funding – HB 605 updates eligibility criteria for the GRANT (Government Resources Accelerating Needed Transformation) program to include grants through the Delta Regional Authority which have language emphasizing that local matches make the application more competitive.

Incentivizing Economic Development – HB 606 permits two or more local governments to enter into interlocal agreements aimed at developing real estate as part of regional economic development projects; allows the creation of taxing districts with the authority to impose occupational license fees, and expands the definition of venue for sales tax incentives to include public property held by the state.

Strengthening the Financial Stability of the Teachers’ Retirement System – HB 694 safeguards both pension and healthcare benefits without increasing the burden on taxpayers, beneficiaries or employers. The measure establishes a default position that ensures once the health trust reaches 100% funding, state and employer payments made on behalf of local districts are redirected to strengthen pension benefits.

Modernizing Medicaid Services – HB 695 establishes a work requirement for recipients who are physically able and not directly providing care to a child or disabled adult; moves the pharmacy rebate fund to the Medicaid program, and introduces data collection and submittal requirements for Medicaid services, specifically behavioral health and managed care.

Incentivizing Work and Economic Investment – HB 775 expands the use of tax increment financing (TIF) to authorize taxing districts organized as part of regional economic development projects to impose a special tax on property located within their boundaries; levies a tax on hemp-derived beverages, and updates seller credits as part of the beginner farmer program. The measure also provides more flexibility in lowering the individual income tax by allowing the adoption of smaller incremental reductions when existing triggers are met.

As always, I can be reached anytime through the toll-free message line in Frankfort at 1-800-372-7181. You can also contact me via email at Bobby.McCool@kylegislature.gov and keep track through the Kentucky legislature’s website at legislature.ky.gov.