Kentucky Governor Andy Beshear announced today that the state's surging economy has generated an unexpected $781 million in surplus funds, which he will use to reverse General Assembly cuts to Medicaid, bolster senior meals programs, and fully fund Michelle P. Waiver slots. This significant financial boost allows the administration to address critical service shortfalls.
The funding originates from an unbudgeted $476 million budget surplus and over $350 million in unexpected corporate income tax payments. Governor Beshear stated, "Thanks to strong fiscal management by my administration and an economic surge for the state late in the fiscal year, we have more than $781 million in surplus funds available right now to correct mistakes made by the General Assembly."
Of these newly available funds, $255 million will be applied to close the Medicaid gap and reverse the General Assembly’s cuts. The administration will also cover additional costs for existing Michelle P. Waiver slots that were previously underfunded and add an extra $4 million to the senior meals program for fiscal year 2027. Furthermore, over $400 million of the unexpected revenue will be deposited into the state’s Budget Reserve Trust Fund.
Dr. Steven Stack, secretary of the Cabinet for Health and Family Services, emphasized the impact, saying, "Because of the Governor’s actions, we will not be implementing a 4% Medicaid provider fee schedule cut." Dr. Matthew Burchett, an optometrist, highlighted the importance of maintaining strong healthcare access for rural communities, while Rebecca Lowe, a Frankfort parent whose son has autism, shared her family's financial struggles due to previous service reductions.
In addition to healthcare and social services, Governor Beshear announced that his administration has identified $18 million to restore Kentucky’s Road Fund. This follows his earlier executive order to temporarily reduce the state gas tax to provide relief for families facing rising fuel prices. "Today, I am proud to share that we’ve found the dollars that will restore revenue with counties and cities that might have seen an impact," Beshear said.
Despite these immediate actions, Governor Beshear and Dr. Stack cautioned that future reductions still pose a threat to essential services. They encouraged individuals and providers to continue advocating for sustained funding from the General Assembly in upcoming sessions.