Money from KY Capitol Annex project to be moved to fund Lee Specialty Clinic
Gov. Andy Beshear announced he is using money from the Capitol Annex office renovation budget to fill a $4.5 million funding gap for a Louisville clinic that serves patients with intellectual and developmental disabilities.
Beshear said at his weekly press conference Thursday afternoon that he is using his authority to move the money in order to prevent cuts at the Lee Specialty Clinic for the next fiscal year.
The GOP-dominated General Assembly has insisted Beshear had the flexibility to make this move all along. Beshear, a Democrat, has said the two-year state budget bill that passed during the 2026 legislative session contained funding shortfalls for the Cabinet for Health and Family Services, which prompted these cuts.
The Capitol Annex, an office building behind the state Capitol in Frankfort, is where legislative committees meet and lawmakers have their offices. Beshear said the $400 million renovation “includes a parking garage, just for them.”
“You, the public, are not allowed. Can’t talk to them, walking from the car to the office,” Beshear said. “The supermajority shouldn’t be building a Taj Mahal for themselves while families with disabilities are suffering.”
Beshear said his administration will fund the entire $4.5 million funding gap that the Cabinet for Health and Family Services previously said the clinic would experience.
The clinic receives state funding and serves around 1,300 patients, which includes medical and psychiatry services.
Around two weeks ago, Louisville Public Media reported that staff members learned about cuts that would go into effect July 15 and could result in patients being removed from services.
House Minority Caucus Chair Lindsey Burke, D-Lexington, said Thursday that Beshear and Democratic lawmakers warned that critical services were being underfunded as the legislature crafted the next two-year budget.
“I can tell you this: lawmakers do not need a new parking garage nearly as much as Kentuckians need Lee Specialty Clinic to remain open, and Kentucky families need Medicaid dollars much more than we need new buildings,” Burke said during the press conference.
On Wednesday, more than 100 people showed up to the Capitol Annex and rallied in support of the facility. Dozens of patients and supporters testified in front of the Medicaid Advisory and Oversight Board meeting and begged lawmakers and Beshear’s administration to work together to find a solution.
Burke said the Wednesday rally was one of the largest she has seen at an interim committee meeting.
“What we heard from them wasn’t politics,” Burke said. “It was a powerful reminder of our shared values, that we look out for one another, that we care for our neighbors, and that the measure of a person, and indeed this commonwealth, is how we treat people when they need our help. Unfortunately, those values are not reflected in the budget decisions that brought us to this moment.”
Beshear said he learned the Annex renovation project can’t begin until 2029, meaning the funding will return to the state’s rainy day fund until it can be used. He added his solution is only a “Band-Aid” and won’t permanently fix the problem.
“We’ll face it again if the legislature doesn’t come in January and ultimately provide the funding that’s needed, but hopefully it gives enough time for all the families that are worried, that are online or that showed up yesterday, to say come back in January and provide the money directly that’s needed,” Beshear said.
House Speaker David Osborne, R-Prospect, said in a statement that Beshear “created a crisis so he can appear to save the day” and called “the entire situation unwarranted.”
Osborne added funding for Lee Specialty Clinic has been included in the budget passed by the General Assembly “from the very beginning.”
“(Beshear’s claims) created uncertainty for patients, families, caregivers, and providers who depend on these services every day,” Osborne said. “Suggesting that this program was at risk when the funding was there all along was both irresponsible and unnecessarily cruel to those already facing difficult circumstances.
“Furthermore, moving money raises additional questions about what he plans to do with the funding that was already provided. The same is true for healthcare provider reimbursement rates and other essential services funded under the enacted budget.”
Senate Republican leadership declined to comment.
Over the past week, Beshear and Republican lawmakers have traded barbs over who is at fault for the cuts.
Beshear said in a June 23 statement the cuts were because of shortfalls in the two-year state budget passed by the General Assembly.
In the executive branch budget passed by the legislature, lawmakers included a specific line-item for Lee Specialty Clinic and put $720,000 toward it from the General Fund in fiscal year 2027 and $697,500 in the following fiscal year. It’s a decrease from what the clinic received in the current fiscal year, which was $750,000.
The biggest cut for the clinic comes from the funding it receives from the Cabinet for Health and Family Services.
CFHS spokesperson Elizabeth Fisher said in a June 24 statement that the budget forced a “$4.5 million total reduction for the Lee Specialty Clinic, which would cause significant reductions to the outpatient services provided by the clinic.”
The CFHS budget has a 4% reduction for fiscal year 2027 and 7% in fiscal year 2028.
Cabinet for Health and Family Services Secretary Steven Stack said Thursday said he wants to talk to legislature on what gaps are in the current budget.
“The bottom line is all this complexity about where the money comes from is lost on the average, typical person, but we weren’t given enough money to sustain all the work the cabinet currently does,” Stack said.
Republicans, meanwhile, said they believed Beshear’s blame on the General Assembly is misplaced.
Osborne previously said in a statement the Beshear administration has the flexibility and funding to continue supporting the clinic.
“Lawmakers deserve clear data and evidence to explain these decisions,” Osborne said June 24. “Without that transparency, it appears the administration is choosing to cut services that are a lifeline for thousands of Kentuckians rather than reducing spending on outdated, duplicative, ineffective, or nonessential programs.”
