Tax cut, anti-DEI & more: 5 things to watch for in the 2025 Kentucky legislative session
Kentucky’s state legislature is about to take center stage.
The GOP-led General Assembly kicks off its 30 day session Tuesday, and it’s got a handful of priority items on its to-do list.
Republicans in the legislature have crafted policy and controlled the state budget with little input from Democratic Gov. Andy Beshear ever since he took office. Now with four-fifths majorities in the 38-member Senate and 100-member House, that isn’t likely to change.
What are their priorities?
Two things seem clear: the Republicans will move swiftly on cutting the personal income tax rate once again and they will prioritize passing some form of legislation limiting diversity, equity and inclusion practices in education.
Beyond that, it gets murkier.
But each legislative session takes on an identity of its own. Unexpected issues often arise, and can even take center stage.
Since it’s a 30-day session, also known as a short session, the legislature is not tasked with crafting a state budget. However, the group has re-opened the budget for tweaks as well as spending items in years past.
Here are things to keep an eye on in 2025.
Income tax cut
It’s good to start off with a win.
At least that’s the thinking behind Republicans advancing a tax cut from 4% to 3.5%.
With House and Senate GOP caucuses sometimes at odds with each other over intra-party issues, they’ve been unified behind the plan to get income taxes down. The income tax rate started at 5% before the 2022 passage of House Bill 8, which allows the rate to go down in half-point increments every year where the state meets certain revenue and savings requirements and the legislature votes to affirm another cut.
Last year was the first time the state didn’t meet those requirements, so the rate will remain at 4% come Jan. 1, 2025. But the legislature intends to make sure the rate drops to 3.5% by Jan. 1 of next year, which would be the case if a bill affirming the cut passes this year.
Appropriations & revenue chairs and Republican leaders in both the House and Senate have expressed a desire to get the income tax down.
But the proposal has another proponent: Beshear.
The governor said the cut to 3.5% would “be appropriate” given the state of the economy. Unlike his Republican counterparts, though, he expressed hesitance to go much further.
But the proposal has its detractors, as the Kentucky Center for Economic Policy has been banging the drum against the cuts ever since the legislature started on its path to zero income tax.
Diversity, equity and inclusion
Republicans in the statehouse have made it crystal clear: they’re going to revive their efforts to legislate against diversity, equity and inclusion programs — also known as “DEI” — in higher education.
Last year, a House-led effort to completely eradicate the programs from Kentucky public universities ran up against a softer effort from the Senate to limit certain practices in those institutions. The Senate bill was replaced with the contents of the House bill and the Senate could not agree on how to proceed before the clock ran out.
The tea leaves leading up to session seem to indicate Republicans are more interested in eradication — or at least severe limitation — than something like the original Senate bill.
New GOP Senate Floor Leader Max Wise, R-Campbellsville, said it’s a question less of whether or not something gets passed, but whether the bill “gets more conservative” or “stays vanilla bland.”
“I think you had a lot of members of our Senate caucus leave here last session thinking there wasn’t a lot of transparency in terms of where we started the process of that bill and where we ended up,” Wise previously told the Herald-Leader. “I do think it’ll come back, but I don’t know what form of fashion it will take, if it goes more conservative or if it stays more vanilla bland.”
House GOP Floor Leader Steven Rudy, R-Paducah, told the Herald-Leader he believes the division of the previous House education committee into K-12 and postsecondary committees will help the bill reach final passage.
“Last year, we thought our version had a little more teeth in it than the Senate’s version. The Senate wanted to go a different way, and we just couldn’t get an agreement, but that conversation has continued over the interim,” Rudy said. “I fully anticipate that we’ll get a product that both chambers can move with, and that will be good policy.”
Even though that effort fell short, some universities have responded by ceasing or reconfiguring their programs in 2024. The University of Kentucky eliminated its Office of Institutional Diversity and made several changes to training and hiring. Northern Kentucky University made a similar change.
What that changes, if anything, for the anti-DEI movement in the legislature is yet unclear. But all parties involved have had the better part of a year to prepare since the collapse of last year’s effort.
Rep. Daniel Grossberg
The House Democratic caucus is 19 members deep. But there’s a 20th Democrat in that chamber.
Rep. Daniel Grossberg, D-Louisville, has held onto his seat even after a majority of elected Democrats in the state — Gov. Andy Beshear, Lt. Gov. Jacqueline Coleman, the state party, his own county party and both legislative Democratic caucuses — have called on him to resign.
The calls for his resignation came after the Herald-Leader reported accusations of of sexual harassment and unwanted touching by multiple women, including incidents that led to a lifetime ban from a Louisville strip club.
House Democrats have talked about removing Grossberg from his post, which requires a two-thirds vote from House membership. Republicans outnumber Democrats 80 to 20, so at least 48 GOP members would need to join the 19 Democrats to kick him out.
Republican leadership is not willing to comment on the matter until the Legislative Ethics Commission’s investigation into his conduct is complete.
“There’s an ongoing investigation by ethics. I’m not really going to comment on anything until that ethics investigation is completed,” House Speaker David Osborne, R-Prospect, said.
Opaque by design, the commission’s investigation into Grossberg began late summer of 2024; there is no official timeline on the investigation’s conclusion or release.
Grossberg has steadfastly denied any impropriety, but said in September he was “in treatment” to help curb his “impulsive behavior.”
In November, having narrowly defeated a primary opponent before reporting on his behavior towards women surfaced, Grossberg faced no general election opponent and won another two-year term to office.
For 2026, Grossberg has already garnered a new Democratic challenger in former educator and political operative Max Morley. According to Morley’s campaign, he raised $20,000 in his first three days on the trail.
Grossberg told Louisville television station WHAS that he intends to seek reelection in 2026.
School performance
What exactly it means is unclear, but Republicans in the House and Senate appear keenly interested in “accountability” for underperforming public schools in the state.
Rudy said it could include a focus on curriculum and standards. With the failure of Amendment 2, an amendment that lost by 30 points at the ballot box but was approved by a majority of GOP legislators, the legislature is ready to focus solely on solutions within the existing public school system. That amendment, if passed by Kentucky voters, would have allowed the government to help fund private K-12 education.
“To be honest, to try to get the favor of public education we’ve pretty well just thrown more and more money at it. They still claim it’s not enough. But I think you’re going to see us go deep into the policy and what (return on investment) the state’s getting for the investments in education,” Rudy said.
That perspective is shared in the Senate, at least by Senate President Robert Stivers, R-Manchester.
“We’re going to look at other pathways to have accountability and performance in poorly performing school districts,” Stivers said. “And I think everybody is for that. You want accountability and good performance in public education.”
Like legislation on DEI, that effort could be streamlined by the division of education committees in the House. The new Primary and Secondary Education Committee is chaired by Rep. Scott Lewis, R-Hartford, a former rural public school system superintendent.
Spending matters
Long sessions are where most of the budget work gets done. But oftentimes the legislature identifies a pressing budget need, or at the very least cleanup language, that necessitates opening up the state’s two-year budget that was enacted the prior year.
There are no major spending initiatives on the table this year, but there are plenty ideas floating around that could impact state coffers going forward.
One item of particular interest to House Appropriations & Revenue Chair Jason Petrie, R-Elkton, is the Medicaid budget. He has proposed the formation of an oversight committee on Medicaid programs. In recent years, spending on such programs has caused friction between Democratic governors like Beshear and his father, Steve Beshear, and Republicans in the legislature.
Most recently, Beshear expanded the state’s Medicaid program to include vision, hearing and dental care. He did so through his executive authority, circumventing legislative approval.
“All the expansion in Medicaid has been done without legislation, which really gripes me,” Rudy said. “At the end of the day, Medicaid is eating up more and more and more of the budget, and we have got to get our arms around it.”
Other ideas that wouldn’t necessarily require re-opening the budget, but would require spending down the road, are expanding post-undergraduate opportunities at the state’s comprehensive universities.
Legislators representing these schools have floated, and even passed through one chamber, various proposals, including a veterinary school at Murray State University, an osteopathic medical school at Eastern Kentucky University, a doctorate in aerospace science at Morehead State University.
