Funding requested by Covington city officials for the Covington Central Riverfront project located at the site of the former IRS building is not included in a proposed two-year state budget passed by the Kentucky House on Thursday.
No funds for the 23-acre development are found in the proposed budget in House Bill 6, approved by the House on a 77-19 vote Thursday. The bill now goes to the Senate, which is expected to enter budget negotiations with the House later this legislative session. The 60-day session ends no later than April 15.
Gov. Andy Beshear had proposed a $7.5 million line item, or direct appropriation, for the project in his budget plan unveiled in December. Covington city officials had been working with state lawmakers to ensure the funding – expected to be matched by the city – is included in the next state budget to cover public infrastructure work at the former IRS facility site-turned-future mixed-use development.
Rep. Kim Banta (R-Fort Mitchell), who worked on the proposed House budget as a member of the House Appropriations and Revenue Committee, confirmed in a Thursday text to LINK nky that funding for the Covington Central Riverfront project is indeed missing from HB 6. The committee approved the bill by a 17-1 vote Wednesday.
When asked if funding for the development is in the bill, Banta replied, “not yet.” When asked if the House plans to work with the Senate on funding for the project, Banta said yes.
Sen. John Schickel (R-Union) chairs the Northern Kentucky legislative caucus in Frankfort. According to Schickel, funding for the project is now in the hands of the Senate.
“It is my understanding the funding is not in the House budget for the Covington project, but we are hopeful that we will be able to get it into the Senate budget,” the senator told LINK nky Thursday.
The City of Covington announced on Jan. 3 that it had issued a request for proposals for the first phase of the project’s infrastructure work to include laying utilities, sewer lines, streets and sidewalks. That infrastructure will serve a mixed development of homes, hotels, offices, and shops in the new neighborhood.
The Covington Central Riverfront will be built on a 23-acre city-owned site located both next to the Northern Kentucky Convention Center and directly across the river from the Cincinnati Bengals’ Paycor Stadium. The state approved the project for tax increment financing, or TIF financing, in 2022 to cover infrastructure development for the site. Tax increment financing uses increased tax revenue from new development to pay the project’s cost.
Covington Economic Development Director Tom West said in a Jan. 2024 press release that state economic development officials predict the project, once complete, will increase state tax revenue by approximately $94.5 million over 30 years. A list of development objectives for the project on the city’s website says Covington “will have invested more than $100 million in the neighborhood when all of the infrastructure and public amenities are completed.”
“Clearly the impact will be felt far outside the city’s borders,” West said. “There is an understanding at all levels of state government that having development-ready sites is important to attracting private investment.”
The $129.7 billion state budget found in HB 6 proposes state and federal funding for fiscal years 2025 and 2026. The proposal also includes $2.7 billion for the remainder of fiscal year 2024, ending June. 30.
House Appropriations and Revenue committee chair Rep. Jason Petrie (R-Elkton) on Wednesday reminded state lawmakers and the public that the House is only one step in the state budget process. The 2024 Kentucky General Assembly has until April 15 to pass a budget for the new fiscal year that begins July 1.
“This is the House version,” Petrie said Wednesday. “There will be a Senate version that I suspect will be different. And then there will be a conference committee that will be entirely different, most likely. We continue to listen for input.”
Highlights of the House budget proposal include:
- 4% raises in fiscal year 2025 and 2% raises in fiscal year 2026 across the board for state employees
- $500 million to cover unfunded benefits in the Kentucky Public Pension System
- Nearly $500 million added to the Kentucky Teachers Retirement System over the next two years
- Increased base funding for K-12 public education by 4% (to $4,368) in fiscal year 2025 and by 2% (to $4,455) in fiscal year 2025, or by $117 million next fiscal year and by $164 million in fiscal year 2026 (including funding for full day kindergarten). The House budget would not fund universal preschool, and would not mandate teacher raises.
- Full funding (at 100%) for K-12 public school transportation
- An additional $196 million for the needs-based College Access Program (CAP) over the next two fiscal years
- Increased funding for Medicaid by $548.1 million this fiscal year (2024) and provides an additional $2.6 billion in funding for Medicaid benefits growth in FY 24 and FY 25, including $456.2 million in state restricted and general fund dollars
- $24.1 million in new funding for pay increases for 1,013 Kentucky State Police troopers and commercial vehicle enforcement officers
- $2.3 million in fiscal year 2025 and $4 million in fiscal year 2026 in new funding for new probation and parole officers
- $27.9 million in new funding for pay raises and new hires, plus case management improvements, in commonwealth’s attorney and county attorney offices
Supplemental one-time funding for budget priorities in the next budget cycle is included in a separate bill, HB 1, approved 96-0. That funding would be drawn from the state’s budget reserve trust fund, now estimated at $3.7 billion and counting. Both HB 6 and HB 1 now go to the Senate for its consideration.