KentuckyHB 5002026 Regular SessionHouseWALLET

AN ACT relating to appropriations measures providing funding and establishing conditions for the operations, maintenance, support, and functioning of the government of the Commonwealth of Kentucky and its various officers, cabinets, departments, boards, commissions, institutions, subdivisions, agencies, and other state-supported activities.

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Bill Overview

Analyzed Economic Effects

180 provisions identified: 130 benefits, 22 costs, 28 mixed.

Health account money for public employees

Public employees who waive employer coverage under Kentucky's Public Employee Health Insurance Program receive health account contributions. Employers must contribute at least $175 monthly to a health reimbursement account or health flexible spending account. That equals at least $2,100 over 12 months. The Personnel Cabinet Secretary sets the amount and can impose conditions or limits needed to meet federal law.

Retired teachers get state health support

From July 1, 2026, through June 30, 2028, Kentucky funds health insurance contributions for eligible Teachers' Retirement System retirees. They must receive a retirement allowance, have retired on or after July 1, 2010, and not qualify for Medicare. Eligible retirees under 65 must be allowed into the state health plan offered to active teachers and state employees. Those receiving the maximum single-coverage supplement pay no more than a comparable active-worker contribution plus the standard Medicare Part B premium. Other eligible retirees use the system's Plan Year 2026 graduated formula, and supplements cannot exceed the single-coverage premium.

Training incentives and State Police overtime

Eligible State Police training participants receive $4,653 in 2026–2027 and $4,746 in 2027–2028. Those amounts also apply where a listed agency's restricted-fund appropriation provides training incentives. The law provides $5.5 million each fiscal year to convert compensatory time to paid overtime for nonexempt sworn State Police personnel. A supervisor must approve overtime in advance, and the annual limit is 100 hours. Unauthorized overtime still must be paid under federal and state law, but can lead to discipline.

Training payments for law enforcement workers

Kentucky Law Enforcement Foundation Program participants receive annual training incentive payments. Full-time participants receive $4,653 in 2026–2027 and $4,746 in 2027–2028. Part-time participants receive $2,327 and $2,373 in those years.

School funding and transportation for students

Kentucky's SEEK school funding base guarantee is $4,626 per student in average daily attendance in 2026–27 and $4,792 in 2027–28. District base funding also includes an adjustment equal to the number of limited-English-proficiency students multiplied by 0.096. Funding remains subject to the SEEK appropriation and program requirements. Pupil transportation receives $398.8845 million each year, and vocational transportation receives $7.8331 million each year. The money supports school districts, not payments to families.

Funding for Medicaid provider payments

Additional Medicaid state directed payments receive Restricted and Federal Funds, respectively: $76.5 million and $305.9 million in 2025–2026. The amounts are $153 million and $611.7 million in 2026–2027, then $145.3 million and $581 million in 2027–2028. Medicaid cost settlements receive another $28.7 million in Restricted Funds and $86 million in Federal Funds in 2025–2026. Settlements must relate to Community Based Services or Behavioral Health, Developmental and Intellectual Disabilities department costs. These allocations do not specify changes to household benefits or costs.

School employee retirement and teacher supplements

School district employer retirement matches receive $529.41 million in 2026–27 and $541.26 million in 2027–28 for qualified employees. The law does not state each employee's match amount. Public school teachers certified by the National Board for Professional Teaching Standards have $4 million annually allocated for salary supplements. The Education Department can reduce supplements proportionally when the appropriation is insufficient. The law does not state the supplement per teacher.

Child care help for working families

Child Care Assistance Program funding is $10.176 million in 2026–2027 and $9.858 million in 2027–2028. Services support families earning at or below 160% of the federal poverty level, updated annually by federal health officials. The Employee Child Care Assistance Partnership gets $1 million each year for matching contributions through participating employees and employers. Partnership administrative costs cannot exceed 2%; matching funds from 2025–2026 and 2026–2027 carry forward instead of expiring. These provisions do not set each family's benefit amount.

Childcare providers get income-counting relief

Kentucky funds excluding child care providers' income when deciding Child Care Assistance Program eligibility. It provides $17.24 million in 2026–2027 and $16.67 million in 2027–2028. The provision does not further define covered providers or state each family's benefit amount.

Deaf-blind waiver participants gain service access

Medicaid officials must change regulations, service definitions, or policies to help deaf-blind participants access intervener services. Participants must be eligible for the Michelle P. waiver. These services support independence and community life. The law gives no service amount, funding amount, or start date.

Emergency help and services for veterans

From July 1, 2026, through June 30, 2028, Kentucky provides $300,000 annually for homeless veterans' emergency financial assistance. Veterans' Service Organization programs also receive $187,500 in grants each year. The law does not set each veteran's payment amount or specify the services funded by those grants.

Faster foster approval for kin caregivers

The Cabinet for Health and Family Services must establish provisional foster-home licensing through revised rules that meet federal requirements. Relative and fictive kin homes must receive provisional approval within five days of placement. All federal safety requirements must be met immediately. Training, a home study, and other non-safety steps can be completed within 120 days. Provisional approval must qualify the home for federal Title IV-E foster care maintenance payments; payment amounts are not specified.

Health funding preserved for school employees

The law carries $98.3107 million in General Fund money from 2025–2026 into 2026–2027 rather than letting it expire. The money supports school employee health insurance contributions and health reimbursement accounts. Account contributions support employees who waive coverage. This provision does not set each employee's contribution amount.

Medicaid plans must provide lung screening

Medicaid managed care organizations participating in Kentucky's next contract renewal cycle must provide lung cancer screening to members. Screening can include genetic prescreen testing. The provision does not state an individual payment amount.

More Medicaid home care waiver slots

Kentucky adds 115 Home and Community Based Waiver slots in 2026–2027 and 45 more in 2027–2028. That adds 160 slots across the biennium. Funding is $1.4042 million state and $3.2764 million federal in 2026–2027. It is $1.9536 million state and $4.5584 million federal in 2027–2028. People must qualify for the waiver, and eligibility does not guarantee a slot.

Six-month child care help for families

Families that no longer qualify for the Child Care Assistance Program receive a six-month transition period of continued help. Kentucky provides $1.44 million in 2026–27 and $1.395 million in 2027–28 for this transition. The law does not state each family's benefit amount.

Survivor benefits for public safety families

Kentucky provides $690,900 annually from July 1, 2026, through June 30, 2028, for covered survivor benefits and firefighter insurance premiums. Covered survivors include families of state and local police, firefighters, and active-duty National Guard and Reserve members. Existing Kentucky survivor-benefit and firefighter-insurance laws govern coverage. The appropriation does not specify individual benefits or how the money is divided.

College students get continued aid funding

Kentucky's College Access Program receives $179.3448 million from the General Fund and $1.1 million in restricted funds each fiscal year. The law also provides $450,000 annually from Minority Educator Recruitment and Retention Scholarship loan collections. These funds support assistance for eligible students. This provision does not change eligibility rules or set each student's award.

Raises funded for qualifying public defenders

Public Advocacy attorney raises receive $3.6106 million in 2026–27 and $5.4043 million in 2027–28. Attorneys must have a caseload and be reclassified under House Bill 762 of the 2026 Regular Session. The funding supports annual salary increases, but the law does not state each attorney's raise.

School speech specialists get extra pay

Full-time public school audiologists and speech-language pathologists receive a $2,000 annual salary supplement. They must hold an active Certificate of Clinical Competence from the American Speech-Language-Hearing Association. The law provides $2.312 million each fiscal year; payments can be reduced proportionally if funding is insufficient. For teacher and classified-worker salary schedules, boards must consider other states' actions, the local economy, and hiring and retention. That salary-setting rule does not require a raise.

Two raises for eligible state employees

Eligible Kentucky state employees receive a 2% base salary or wage increase on July 1, 2026. They receive a further 2% increase on July 1, 2027. The dollar amount depends on eligible base pay. The supplied provision does not detail the employee eligibility rules.

Funding for emergencies and Guard deployments

For July 1, 2026, through June 30, 2028, Kentucky provides $4.5 million yearly for qualifying emergency and National Guard costs. Costs must result from a Governor-declared emergency and the Governor calling the Kentucky National Guard to active duty. When qualifying costs exceed $4.5 million annually, additional payments can come from the General Fund Surplus or Budget Reserve accounts. Those additional payments are capped at $100 million across the two-year budget period.

Funding for Kentucky streams and hatchery

The law funds stream mitigation projects with $64.5 million in 2026–27 and $48.6 million in 2027–28. It also provides $33.528 million to build the Western Kentucky Fish Hatchery. The Kentucky Department of Fish and Wildlife Resources receives these restricted funds. These are public projects, not household payments.

Funding for psychiatric hospitals and services

Contracted psychiatric services in Hospital District IV and Appalachian Regional Hospital's KCARE program receive annual funding in 2026–2028. Amounts are $14.6 million in General Fund, $6.8 million in Restricted Funds, and $85 million in Federal Funds. Medicaid officials must seek KCARE federal approval by their next managed-care contract submission or 90 days after enactment, whichever comes first. The application must specify July 1, 2026, as the contract start date. Separately, hospital support payments tied to the behavioral health department receive Restricted and Federal Funds, respectively: $6 million and $14 million in 2025–2026, then $3 million and $4 million each year in 2026–2028.

Funding for preschool and student support

Each year in 2026–28, the law funds Preschool at $84.4811 million, Family Resource and Youth Services Centers at $48.889 million, and Extended School Services at $23.9163 million. Annual reading funds are Read to Achieve, $12.2611 million; Read to Succeed, $11 million; and Statewide Reading Research Center, $1.2 million. Other annual learning funds are Gifted and Talented, $10 million; Mathematics Achievement Fund, $5.019 million; Math Nation, $1 million; AdvanceKentucky, $1.9 million; Dataseam, $3 million; and We Lead CS, $1.5 million. Student and community supports receive: Community Education, $1.85 million; Kentucky Educational Collaborative for State Agency Children, $12.5 million; Jobs for America’s Graduates, $1.6755 million; Save the Children, $2 million; and Kentucky Alliance of Boys & Girls Clubs, $500,000 annually. Annual disability-related funds are Hearing and Speech Center, $100,000; Heuser Hearing and Language Academy, $100,000; and Visually Impaired Preschool Services, $500,000. Local School District Life Insurance receives $1.391 million annually, and Teach for America receives $700,000. None of these allocations can pay state-level administrative costs.

State support for school building levies

For 2026–27 and 2027–28, school facilities levy equalization receives $54.3704 million and $46.4492 million. Eligible districts imposing the levy in KRS 157.621(1)(b)1 receive this support in addition to other specified equalization. A separate allocation provides $18.7468 million and $17.1861 million, paying qualifying districts 100% of calculated equalization. This includes eligible districts lacking equalization for a five-cent equivalent levy under other provisions. Both allocations must pay debt service, new facilities, or major renovations. Base Realignment and Closure facility equalization receives $3.1622 million and $2.7494 million for districts eligible under KRS 157.621(1)(c)1.

Kentucky funds two conference center projects

The Northern Kentucky Convention Center gets $58 million for renovation and expansion. That includes $18 million in restricted funds and $40 million in agency bonds. The law reauthorizes $7.5 million in bonds for a new conference center at John James Audubon State Park. It also reauthorizes and moves $2.8 million in bonds from the project listed in 2022 Kentucky Acts chapter 199, Part II, J., 2., 002.

Loan funding for community water systems

Kentucky funds infrastructure loans for eligible water systems and communities, not direct household payments. The Federally Assisted Wastewater Program receives $120.062 million in 2026–27 and $24.268 million in 2027–28. The Drinking Water Revolving Loan Program receives $153.03 million and $21.953 million in those years. Projects must qualify under the respective Kentucky Infrastructure Authority loan program.

Funding supports rural health care providers

The federal appropriation includes $212.9056 million annually from the Rural Health Transformation Fund for 2026–2028. The provision does not explain how recipients share the money. Separately, eligible clinics and small regional health providers receive $77,900 annually for malpractice insurance premium reimbursements. That reimbursement funding applies from July 1, 2026, through June 30, 2028, under Kentucky's existing premium reimbursement law.

More school and community nutrition funding

The law adds $100.1812 million in federal funds each year for school and community nutrition programs in 2026–2028. This supports increased program spending. The provision does not state household eligibility rules or individual benefit amounts.

Community colleges get facility project funds

The law funds Kentucky Community and Technical College System facilities, equipment, property purchases, and aviation equipment. Jefferson Community and Technical College receives $47.3 million in agency bonds for a student services building. Bluegrass Community and Technical College receives $42 million in bond funds for a prison education program. Authorized projects also include Fire Commission training and storage facilities. These are program and facility funds, not direct household payments.

Eligible districts get school building support

The law provides $75.5749 million in 2026–2027 and $70.8087 million in 2027–2028 for retroactive school facility funding. Qualifying districts must have levied a tax rate subject to voter recall. Levies before January 15, 2024, receive 100% of calculated equalization during the biennium. Levies after January 15, 2024, and before January 1, 2026, receive 25%. Funds must pay for debt service, new facilities, or major renovations.

Funding for students' career training programs

Kentucky provides $127.1159 million annually in 2026–27 and 2027–28 for career and technical education. That includes $70.0634 million each year in extra funding for qualifying local centers, state area technology centers, and programs. The extra funding follows enrollment and incentive criteria under state law. It funds education programs rather than payments to students.

Public universities get building upgrade funds

The law funds Louisville and Western Kentucky University construction, renovations, equipment, technology, athletics, and student housing projects. Louisville receives $10 million in bonds for preservation, $142 million in bonds for a STEM building, and $70 million in other funds for medical research construction. Western Kentucky receives $10 million in bonds for preservation, $20 million in restricted funds for media equipment, and $10 million in restricted funds for exercise science renovations. The statewide college preservation pool also covers maintenance, eligible pedestrian and student parking areas at state residential facilities, and removal of university-owned buildings. Projects using that pool must be reported to the Capital Projects and Bond Oversight Committee.

Limits on students’ pandemic tuition lawsuits

Public colleges, affiliated corporations, officers, employees, and agents have immunity from certain pandemic tuition claims. Claims must concern tuition for a term that included March, April, and May 2020. The alleged loss must arise from actions or failures to act during or in response to the COVID-19 emergency. Those actions must protect public health and safety while following federal, state, or local guidance. The immunity blocks covered claims for damages, court declarations, or other court-ordered relief.

Governor must address remaining budget shortfalls

The Governor must take further action if an actual or projected General Fund shortfall remains after the first 11 reduction steps. The actions concern Executive Branch budget units and must follow the budget plan’s criteria. The law does not identify particular service cuts or dollar amounts.

Kentucky pays more SNAP operating costs

Kentucky provides $43.5 million in 2026–2027 and $58 million in 2027–2028 for SNAP administrative costs. Its required share rises from 50% to 75% under H.R. 1 of the 119th Congress. This provision funds the state's higher operating costs, not changes to household benefit amounts or eligibility.

State agencies face operating cost controls

State budget, finance, and personnel officials must control agency spending in a stated priority order. Steps include reducing temporary workers, abolishing positions vacant for six months, and pausing discretionary raises. Specified advertising, travel, food, and other coded expenses require prior written approval. Officials must also reduce or eliminate programs and services not required by law or regulation. State and federal laws and court orders take precedence.

Budget shortfalls trigger transfers and cuts

When a General Fund shortfall of 5% or less triggers budget reductions, branch heads can transfer excess unappropriated restricted funds. This adds General Fund resources but leaves less money for the source funds' purposes. Fiduciary funds, both local government aid funds, specified tobacco settlement funds, and the Kentucky Permanent Pension Fund are protected from transfers. Unused debt-payment money, pension contributions above legal requirements, and pension-insurance contributions above actuarial requirements must lapse. Executive agency operating budgets must be cut enough to balance either fiscal year, excluding both local government aid funds. The Secretary of State, Attorney General, Treasurer, Agriculture Commissioner, Auditor, Commonwealth's Attorneys, County Attorneys, and their offices are exempt. Those officials or the Prosecutors Advisory Council can choose cuts, but not above the actual shortfall percentage. These rules do not themselves cut individual pension benefits.

Rules for state shortfalls and surpluses

For General Fund shortfalls of 5% or less, branch heads must identify and apply excess appropriations within their branches. Eligible excess comes from vacancies, turnover, or lower operating expenses, grants, and capital spending. Branch heads certify the amounts, and the Finance Secretary carries out the actions. In 2026–27 and 2027–28, available undesignated balances can cover authorized Necessary Government Expenses; all remaining money goes to the reserve fund. Surplus cannot be held for those expenses in a later fiscal year.

Highways get surplus funds, face cuts

Kentucky sends all Road Fund Surplus Account money to the State Construction Account for the 2026–2028 highway construction program. The law does not state the surplus amount. The Governor must reduce spending when actual or projected Road Fund receipts fall below the applicable revenue threshold. Thresholds are $1.844 billion in 2025–26, $1.836 billion in 2026–27, and $1.9094 billion in 2027–28. Reductions must protect the highest possible service level; related laws and General Assembly actions can change the thresholds.

Medicaid vendor cuts fund higher rates

In Plan Year 2028, Kentucky reduces Medicaid managed care vendor payments by 2.50%. Federally approved state directed payment programs are excluded. Provider reimbursement rates cannot be reduced under this provision. Savings must raise fee-for-service reimbursement rates for care provided to Medicaid beneficiaries. The law does not specify a change in patients' benefits or access.

Kin caregivers can request custody changes

Relatives and family-like caregivers with temporary custody can ask the Cabinet for Health and Family Services to seek a custody change. They can ask within 120 days after receiving temporary custody or after a verified qualifying event. Events include caregiver death or incapacity, certain disability-related income loss or retirement, divorce, or legal separation. Disaster or fire-related loss of a home or job also qualifies. So does a major change in the child’s medical or behavioral health needs requiring substantial caregiver involvement; approval is not guaranteed.

Travel help for Medal of Honor recipients

Kentucky residents who received the Congressional Medal of Honor can receive approved travel and daily expense support. They must attend a veterans, military, or memorial event in Kentucky. The Veterans’ Affairs Commissioner must approve payment. No amount is set, and payment is not guaranteed.

Brain injury support grants for veterans

From July 1, 2026, through June 30, 2028, two organizations each receive $93,700 annually. They are the Brain Injury Association of America's Kentucky Chapter and the Epilepsy Foundation of Kentuckiana. Each grant must solely support work with veterans who experienced brain trauma and their families. The law does not set an individual payment.

Married state workers can share coverage

The Personnel Cabinet can allow married couples to enroll together in one family health benefit plan. Both spouses must be eligible for the state health insurance plan. Cabinet permission is discretionary, so combined coverage is not guaranteed.

Specialty care funding for disabled people

Lee Specialty Clinic receives $720,000 in 2026–27 and $697,500 in 2027–28 for specialty medical services. The services support eligible people with moderate developmental and intellectual disabilities living in residential or community settings. The law does not set a payment for each patient.

Support for youth leaving foster care

Independent living supports for children aging out of foster care get $1.92 million in 2026–2027 and $1.86 million in 2027–2028. The Fostering Success Program gets $480,000 and $465,000 in those years. The law does not specify each person's services or payment amount.

Eligible students get exam cost help

The law funds Advanced Placement and International Baccalaureate exam costs for students eligible for free or reduced-price meals. It provides $960,000 in 2026–2027 and $930,000 in 2027–2028. The provision does not state a per-student payment amount.

Funding for prepaid tuition and refunds

The Kentucky Affordable Prepaid Tuition Trust Fund receives $5.1 million in 2026–27 and $5.6 million in 2027–28. The money supports projected tuition payments and refunds through 2025–26 for beneficiaries entitled to them. The law does not state each beneficiary's payment.

Park workers can keep full-time status

Some Kentucky state park jobs can remain full-time with as few as 25 assigned work hours per week. The work must depend on changes in tourism. The law does not specify a change in pay or benefits.

Special schools gain state technology access

The Kentucky School for the Deaf and Kentucky School for the Blind are fully eligible for the state education technology system. They can participate alongside local school districts. Participation must account for their students' special needs.

Veterans Center staff keep premium pay

Kentucky Veterans Centers can continue extra pay for qualifying weekend and holiday work. The authority runs from July 1, 2026, through June 30, 2028. The law does not state the extra-pay rate.

Kentucky businesses get hotel contract preference

The State Fair Board must prefer qualifying Kentucky businesses for hotel development improvements on its properties and recommend their participation. Businesses must have Kentucky employees and a Kentucky executive office that directs employees, other offices, and affiliated entities. The preference does not guarantee a contract or any set amount of work.

Annual money for state park upkeep

The Kentucky State Parks maintenance pool receives $10 million in investment income in each fiscal year, 2026–27 and 2027–28. The money supports park upkeep, not household payments.

Correctional treatment centers get payment floor

Corrections must pay contracted substance abuse, mental health, and reentry centers for at least 65% of contracted beds monthly. This payment floor applies in both 2026–2027 and 2027–2028. The law does not state a payment amount per bed.

Corrections can receive extra overrun payments

The law allows up to $10 million in extra correctional payments in each of 2026–2027 and 2027–2028. Payments apply when operating costs or local jail daily payments exceed appropriations for the budgeted average daily state-felon population. Money can come from the General Fund Surplus Account or Budget Reserve Trust Fund. The State Budget Director must notify the relevant legislative committee of the need and amount of certified spending.

Counties get jail and corrections support

The Kentucky Local Correctional Facilities Construction Authority provides $8.8473 million in 2026–2027 and $7.7422 million in 2027–2028 for local facilities and operations. Counties also receive $4.6302 million each year under House Bill 757 of the 2026 Regular Session. Another $860,000 each year funds annual $20,000 payments to each county with a life-safety jail or closed jail. Those payments are in addition to the payment required by KRS 441.206(2).

Funding for conservation programs and districts

The Environmental Stewardship Program receives $1.7731 million in 2026–2027 and $1.6386 million in 2027–2028. The Division of Conservation receives $886,500 and $819,300 in those years for direct aid to local conservation districts. Both allocations use General Fund tobacco money. They support programs and districts, not direct household payments.

Funding for Jefferson youth detention centers

The law provides $6.5153 million in 2026–27 and $12.0198 million in 2027–28 for two Jefferson County detention centers. The funding supports the Jefferson Regional Detention Center in Lyndon and the Jefferson County Youth Detention Center in downtown Louisville. It does not create household payments.

Funding for recovery and drug programs

The Volunteers of America Family Recovery Court gets $480,000 in 2026–2027 and $465,000 in 2027–2028 for operations. Operation UNITE gets $1.44 million and $1.395 million in those years. Tobacco settlement money provides the Kentucky Office of Drug Control Policy with $2.6596 million and $2.4579 million, respectively. These appropriations fund operations and programs, not specified household payment amounts.

Funding for shelters and victim services

Children's Advocacy Centers receive $10.5577 million annually in 2026–2027 and 2027–2028. Domestic violence shelters receive $13.9127 million each year. Rape crisis centers receive $7.7761 million each year. The funding supports operating costs and services, not a set payment to each person.

Funding for two justice programs

Tobacco settlement money funds Volunteers of America’s Restorative Justice Program with $221,600 in 2026–2027 and $204,800 in 2027–2028. The Prosecutors Advisory Council’s Rocket Docket Program gets $1.94 million and $1.86 million in those years. Rocket Docket funding is paid in quarterly installments. These provisions do not set individual eligibility rules or household payment amounts.

Funding supports Gateway youth diversion

Gateway Juvenile Diversion receives $247,500 in 2026–2027 and $239,800 in 2027–2028. The funding supports the program and its youth services from July 1, 2026, through June 30, 2028. This provision does not set individual eligibility rules or direct payments.

Kentucky funds forensic labs and examiners

The Northern Kentucky Medical Examiner’s Office gets $1.6187 million for staffing in 2027–2028. Crime labs get $609,700 in 2026–2027 and $770,500 in 2027–2028. This supports Northern Kentucky lab relocation and four Central Kentucky forensic biologist positions in 2026–2027. It also supports two Northern Kentucky forensic biologist positions in 2027–2028.

Kentucky funds park and visitor-facility upkeep

The law funds maintenance in each of 2026–2027 and 2027–2028. The Horse Park gets $1.5 million yearly, and the State Fair Board gets $3 million. The Artisans Center gets $500,000 yearly, and the Kentucky Center for the Arts gets $550,000. Those maintenance pools use investment income. Fish and Wildlife Resources gets $3 million yearly: $1.5 million in restricted funds and $1.5 million in federal funds.

Kentucky funds tobacco manufacturer enforcement

Phase I Tobacco Settlement money funds enforcement against noncompliant tobacco manufacturers that do not participate in the settlement. The Attorney General gets $150,000 in each of 2026–2027 and 2027–2028. The Department of Revenue gets $250,000 each year. These appropriations fund enforcement, not household payments.

New ranges for police training

Middletown receives $15 million in 2026–27 and $10 million in 2027–28 to build a statewide police training range. A separate indoor range and training facility receives $2 million in restricted funds and $18 million in federal funds. That facility must allow shared use by all law enforcement agencies as far as federal law permits.

Old State Capitol gets preservation funding

The law provides $5.023 million in investment income for the Kentucky Old State Capitol preservation project. It also reauthorizes $2.185 million in bond funds and $169,000 in other funds. The money supports preservation work, not household payments.

Operating support for Family Scholar House

Family Scholar House gets $960,000 for operations in 2026–2027 and $930,000 in 2027–2028. The law does not specify which services this money supports. It also does not set individual eligibility rules or household payment amounts.

Payments continue for sentencing credit programs

The law provides $13.5 million each fiscal year during 2026–28 for payments tied to qualifying program completions that earn sentencing credit. Payments continue despite the statutory expiration under KRS 197.045(6)(a), (b), and (c). The provision does not say this money goes directly to incarcerated people.

Police get training and equipment funding

Louisville gets $5 million in 2026–2027 to build a driving track for statewide law enforcement training. State Police get $1.036 million that year for mobile data terminals and docking stations; unspent money carries into 2027–2028. That funding includes excess proceeds from the sale of specified state property in Owensboro. Two Capitol campus Trooper R security contracts receive $125,600 in each of 2026–2027 and 2027–2028.

Prisons and counties get medical funding

Adult correctional institutions get $4 million in 2026–2027 and $9 million in 2027–2028 for higher medical costs. County medical-care contracts get $792,800 each year, with Department of Corrections approval and distribution under the KRS 441.206 formula. Another $851,800 each year partly reimburses county medical claims above the KRS 441.045 threshold. These funds support institutions and counties, not direct household payments.

State funding for Mary Kendall Homes

Mary Kendall Homes receives $247,500 in 2026–2027 and $239,800 in 2027–2028. Funding applies from July 1, 2026, through June 30, 2028. The provision does not set individual eligibility rules or direct payments to people it serves.

State matching money for disaster recovery

From July 1, 2026, through June 30, 2028, Military Affairs can request up to $25 million each fiscal year. The money must match eligible federal aid for a presidentially declared disaster or emergency. FEMA reimbursements for eligible state disaster costs go into the Budget Reserve Trust Fund Account. This provision does not create household payments.

State money for emergency forest fires

Kentucky sets aside at least $2.5 million annually from the Natural Resources General Fund budget for emergency forest fire suppression. Costs above $2.5 million can receive up to $4 million in additional payments each year. Those payments can come from the General Fund Surplus Account or Budget Reserve Trust Fund Account. Unspent set-aside funds return to the Budget Reserve Trust Fund Account.

State Police gain emergency response support

State Police emergency costs can receive General Fund support when the Governor declares an emergency and calls extraordinary duty. Money can come from the General Fund Surplus Account or Budget Reserve Trust Fund, following the law’s funding procedures. State Police can also directly acquire land for towers needed by the Kentucky Emergency Warning System or specified radio replacement project. The law states no funding or land purchase amount.

Support for regional forensic services

Unspent money from the 2022 authorization of $1.8 million remains available to reestablish the Northern Kentucky Regional Medical Examiners Office. This is retained funding, not a new $1.8 million appropriation. Qualified retirees can also be recruited for supported forensic biologist jobs at the Northern and Central Kentucky Crime Labs. The hiring rule does not guarantee a job or set pay.

Three regional offices get driver-testing support

The law funds staffing and driver testing at three existing regional driver’s licensing offices. It provides $1.3029 million in 2026–2027 and $1.57 million in 2027–2028. It does not specify a change in testing fees.

Funding for medical marijuana product testing

Kentucky provides $2 million in 2026–27 and $2.75 million in 2027–28 for required medical marijuana testing. The funding supports analysis and testing of medical marijuana and edible products. It does not change patient eligibility or create a household payment.

Funding to complete statewide emergency calling

Kentucky provides $5 million in each year, 2026–27 and 2027–28, to complete statewide next-generation 9-1-1 deployment. This totals $10 million during July 1, 2026, through June 30, 2028. The system must meet the National Emergency Number Association i3 technical standard.

Barren River treatment funds stay available

Unspent money previously authorized in 2024 for the Barren River regional substance use disorder services pilot carries forward. It does not expire at the end of the funding period. The law does not state how much remains or provide direct participant payments.

Funding for children's cancer research

Kentucky provides $5 million annually in 2026–27 and 2027–28 to the Kentucky Pediatric Cancer Research Trust Fund. The money supports pediatric cancer research and expanded clinical trials at the University of Kentucky and University of Louisville. It does not guarantee any child's eligibility for a trial.

Funding for family health and screening

For 2026–27 and 2027–28, respectively, HANDS receives $5.3015 million and $4.8994 million. Healthy Start and Early Childhood Mental Health each receive $620,600 and $573,500. Early Childhood Oral Health receives those same amounts from Kentucky Healthcare Improvement Fund interest. Lung cancer screening receives $443,300 and $983,100; smoking cessation receives $1.7731 million and $1.6386 million. Colon cancer screening receives $480,000 and $465,000. These funds support services without setting individual benefits or eligibility.

Funding for foster and kinship families

The law provides $22 million each budget year, 2026–2027 and 2027–2028, for foster and kinship care. It maintains support, helps secure placements, and enhances services for children with exceptional needs; other available reserves must be spent first. Maryhurst gets $1.35 million each year for higher reimbursements in its five Specialized Programs. In 2026–2027, therapy reimbursements for youth in state custody total $102,100 for Kentucky United Methodist Children’s Homes and $2,200 for Sunrise Children’s Services. Both reimbursements support their Independent Living Programs.

Funding for Hart supported living

The Hart-Supported Living Program gets $6.2881 million in each budget year, 2026–2027 and 2027–2028. The appropriation supports the program. It does not set individual eligibility rules or household payment amounts.

Funding for psychiatric and residential care

In both 2026–27 and 2027–28, Kentucky provides $20 million for staffing and more patients at state psychiatric and intellectual disability facilities. Personal care homes receive $12 million each year for facility reimbursements. Eastern State Hospital lease payments receive $9.8073 million and $9.808 million, respectively. Those lease payments go to Lexington-Fayette Urban County Government to retire hospital construction debt. These funds support facilities, not direct household payments.

Funding for regional health education centers

Kentucky's eight regional Area Health Education Centers receive $2.4 million in 2026–27 and $2.325 million in 2027–28. The money supports center operations, not direct household payments.

Funding for treatment and recovery services

Substance use prevention and treatment for pregnant women with a substance abuse history receive tobacco settlement funding. Amounts are $1.1525 million in 2026–2027 and $1.0651 million in 2027–2028. The Healing Place receives $1.44 million and $1.395 million in those years for direct client services. Existing Certified Community Behavioral Health Clinic demonstration participants receive $2.4414 million in 2027–2028 to maintain services, including $1 million one-time. These funds do not set individual payments or guarantee care to each person.

Funding for young children and caregivers

Tobacco settlement funds provide $8.4221 million in 2026–27 and $7.7833 million in 2027–28 for Early Childhood Development. Early Childhood Adoption and Foster Care Supports receives $1.7731 million and $1.6386 million, respectively. Relative and fictive kin caregiver purposes receive $6 million each year; federal sources can include foster care payments and TANF funds. Fictive kin are caregivers with family-like ties to a child. Tobacco funds also provide the Early Childhood Advisory Council $1.0638 million and $983,200, respectively. These allocations do not set caregiver payments or eligibility rules.

Funding for Youth Villages Intercept

The Youth Villages Intercept Program gets $6.3786 million in General Fund money and $6.3964 million in federal funds in 2026–2027. In 2027–2028, it gets $7.7923 million and $8.9977 million from those sources, respectively. The law funds the program without setting individual eligibility rules or household payment amounts.

Funding keeps poison help services running

Kentucky provides $1 million in each budget year, 2026–27 and 2027–28, for the Kentucky Poison Control Center. The money supports its operations and poison-related information and assistance.

Higher Medicaid payments for dental care

Medicaid dental rate increases receive $8 million in Restricted Funds and $31.6 million in Federal Funds each year in 2026–2028. The Technical Advisory Committee on Dental Care must recommend which procedures receive priority to the health cabinet. The law does not state the new rates for specific procedures. These are payments to providers, not household checks.

Higher payments for ventilator care facilities

Beginning January 1, 2026, qualifying hospital-based ventilator facilities receive $1,220 daily instead of $982, a $238 increase. Facilities must have a separate ventilator unit with more than 100 beds and a dedicated pediatric unit with at least 12 beds. Drugs remain outside the daily rate and are reimbursed separately under Kentucky Medicaid drug rules. Funding includes $2.7 million in General Fund and $6.3 million in Federal Funds each budget year.

Kentucky funds early childhood development programs

Early childhood development initiatives receive $21.0181 million in 2026–2027 and $19.9997 million in 2027–2028. The funding uses tobacco settlement payments and lapsed funds. It supports the initiatives named in this part of the law, without setting household eligibility or individual benefit amounts.

More funding for Ryan White participants

The Ryan White Program receives $4 million in 2026–27 and $6 million in 2027–28. The money supports more participants and higher medication costs. The law does not change eligibility or set each participant's benefit amount.

More staffing funds for veterans centers

Bowling Green Veterans Center receives $5.6168 million in General Fund and $10 million in Restricted Funds each year in 2026–2028. This supports staffing and operations. Restricted Funds for added Thomson-Hood staff total $5.1108 million in 2026–2027 and $5.4884 million in 2027–2028. Western Kentucky Veterans Center receives $6.3974 million and $6.7786 million in Restricted Funds for added staff in those years. These provisions do not change resident eligibility or create household payments.

Payments support emergency shelters for children

Supplemental payments for children's emergency shelter services total $528,000 in 2026–2027 and $511,500 in 2027–2028. Pediatric facilities must be dually licensed and provide those shelter services to qualify. The money goes to facilities, not households.

Education and job support for disabled adults

Vocational Rehabilitation receives $3.5 million in 2026–27 and $3.6 million in 2027–28. This funding meets increased state matching and ongoing spending requirements for federal vocational rehabilitation grants. Heuser Hearing Institute receives $1.92 million and $1.86 million, respectively. Its funding supports programs addressing education and achievement gaps for deaf and hard-of-hearing adults. Neither allocation sets individual payments.

Families get clearer school performance results

SEEK-funded districts must prominently post their latest Kentucky Summative Assessment reading and math results on district and school websites. Required proficient and distinguished score percentages must use at least 16-point type. Websites must link to detailed assessment results. The Department of Education must publish school rankings by overall academic performance and ensure district compliance.

Funding for early childhood development scholarships

The Early Childhood Development Scholarship Program receives $2.4 million in 2026–27 and $2.325 million in 2027–28. The law funds the program but does not state who qualifies, award amounts, or covered expenses.

Library buildings and children's reading get funding

Public library construction receives $3.0747 million annually in 2026–27 and 2027–28; expired debt-service payments return to the Budget Reserve Trust Fund Account. Imagination Library of Kentucky receives $2.5 million annually. Libraries and Archives and Health and Family Services must jointly study ways to enroll more low-income children and foster children. Their report on findings, strategies, and implementation costs is due November 1, 2026.

Safety funding for public and private schools

The Center for School Safety receives $15 million annually in 2026–27 and 2027–28 for legally authorized school safety work. Eligible sites include public and private school buildings, campuses, grounds, recreational areas, and athletic fields. The center can retain no more than $2 million annually for operations and administration. Officer salary aid receives $11.5 million annually from the General Fund and $11.5 million from Restricted Funds. The Education Department reimburses local districts and nonpublic schools up to $20,000 per full-time certified school resource officer.

School safety and mental health funding

For July 1, 2026, through June 30, 2028, the law funds implementation of Kentucky's 2024 school-safety law. That provision states no dollar amount or specific safety measures. Separately, $7.4125 million each year reimburses school-based mental health provider positions, measured as full-time-equivalent jobs. The Kentucky Center for School Safety must set district funding rules with the Office of the State School Security Marshal. Rules must consider districts' use of Medicaid funding and support a fair, balanced statewide distribution.

Bond funding for economic development projects

Three economic development programs each get $5 million in bond funds in both 2026–2027 and 2027–2028. They are the Economic Development Bond Programs, High-Tech Construction/Investment Pool, and Kentucky Economic Development Finance Authority Loan Pool. The economic development secretary may use existing appropriations interchangeably among the three named programs or pools for economic development projects. That transfer authority adds no money and creates no direct household payment.

Earlier project and maintenance money preserved

Unspent money from the specified 2022 American Battlefield Trust appropriation remains available rather than expiring. Maintenance pool funding from the 2022–24 and 2024–26 budgets also carries forward despite capital-project expiration rules. These provisions preserve earlier money rather than create new appropriations. The remaining amounts are not stated.

Frankfort gets property tax replacement money

Kentucky pays Frankfort $200,000 annually from July 1, 2026, through June 30, 2028. The payments replace property taxes the city normally receives. This provision supports city finances without changing household taxes or providing household payments.

Funding for exposition expansion and staff

The Kentucky Exposition Center gets $1.7206 million in 2026–2027 and $3.7401 million in 2027–2028 for expansion and staffing. The money comes from the State Fair Board’s restricted-fund appropriations. It supports the facility and its operations, not direct household payments.

Funding for Kentucky mountain recreation

The Kentucky Mountain Regional Recreation Authority gets $1.5 million annually from July 1, 2026, through June 30, 2028. The money comes from taxes collected under KRS 142.400(2). The Tourism, Arts and Heritage Cabinet transfers those funds to the authority. This funds the authority rather than direct household payments.

Funding for regional and local agencies

Beginning July 1, 2026, area development districts receive operating support through the Joint Funding Administration Program. It provides $3.8247 million in 2026–2027 and $3.7052 million in 2027–2028. Districts also get $240,000 and $232,500, respectively, to match increased Appalachian Regional Commission grants. The Department for Local Government gets $2 million in restricted funds for operations in 2026–2027. These appropriations support agencies and regional work, not direct household payments.

Funding supports the Vital Statistics office

Restricted Funds include $1.6408 million each year in 2026–2028 for increased Office of Vital Statistics operating costs. The provision supports agency operations. It does not change household fees or create an individual benefit.

Kentucky directs settlement and bond money to debt

Tobacco settlement money provides $14.1002 million for state debt payments in 2026–2027 and $13.8809 million in 2027–2028. Bond investment income above required IRS arbitrage rebates and penalties must also go toward debt payments. Leftover bond proceeds must go toward debt payments after a capital project is complete, consistent with federal tax rules.

Kentucky funds agricultural development for farms

The Agricultural Development Fund gets $38.0865 million in 2026–2027 and $35.1976 million in 2027–2028 from tobacco settlement payments. The money supports the agricultural development initiatives named in this part of the law. This appropriation does not identify individual recipients or set household eligibility.

Legislative appointment background checks stay free

State Police cannot charge the Legislative Research Commission for background checks requested during specified confirmation investigations. These cover appointments and reappointments to boards, commissions, and administrative law judge positions. The rule does not create a general fee exemption for individuals.

Matching money for Delta development grants

Area development districts receive $240,000 in 2026–2027 and $232,500 in 2027–2028 to match increased Delta Regional Authority grants. Funding runs from July 1, 2026, through June 30, 2028. It supports regional development projects through districts, not direct household payments.

Older infrastructure projects keep unused funding

Qualifying water, sewer, and economic-development projects from the listed 2003–2009 bond pools keep their unused funding. The money does not lapse and stays credited to previously authorized projects. The General Assembly can expressly reauthorize and move the funds. The law does not state how much money carries forward.

Operating funds for Kentucky's film office

The Kentucky Film Office receives $500,000 each year in 2026–2028 for staff and operating costs. In 2027–2028, it also receives 2.5% of transient room tax collections, capped at $500,000. The funding supports the office rather than direct household payments.

Quarter Horse racing gets targeted funding

With Kentucky Quarter Horse Racing Association approval, the Horse Racing and Gaming Corporation can fund Grade I race rights purchases. The race must run at a licensed Kentucky track or association, and the rights belong to the Association. Kentucky venues offering a Grade I race can also seek approved funding for infrastructure reasonably needed for race-meet safety and integrity. Total spending under the section cannot exceed 20% of current receipts of the KRS 230.405 fund. The money must be appropriated by March 1, 2027.

State funding supports the Hope Center

The Hope Center receives $96,000 in 2026–2027 and $93,000 in 2027–2028. The provision does not describe the services funded or establish a direct household benefit.

State officials must reduce travel spending

Three state officials must take steps to reduce Executive Branch travel spending during April–June 2026. They are the State Budget Director, Executive Cabinet Secretary, and Finance and Administration Cabinet Secretary. The requirement covers both in-state and out-of-state travel. The law sets no dollar savings target and does not change household travel costs.

Tobacco money stays reserved for programs

Phase I Tobacco Settlement payments enter the General Fund but keep a separate identity. Unspent balances carry into the next fiscal year instead of becoming General Fund surplus. When a General Fund shortfall of 5% or less triggers budget reductions, unexpected settlement receipts must follow Part X’s allocations. Those unexpected receipts cannot be transferred to the General Fund.

Matching money for local flood projects

The Department for Local Government receives $6 million in investment income in each year, 2026–27 and 2027–28. The money provides local matching funds for flood-control projects. It supports community infrastructure rather than direct household payments.

Funding for cancer screening and research

Kentucky funds medical research and screening at the University of Kentucky and the University of Louisville. Cancer research and screening receive $6.1659 million in 2026–27 and $5.7455 million in 2027–28, split equally. Each year's cancer funding includes $625,000 from unused early childhood funds. Spinal cord and head injury research receives $1.92 million and $1.86 million, respectively, shared between the universities. Kentucky's ovarian cancer screening outreach program receives $960,000 and $930,000, respectively. These funds do not set individual screening eligibility or promise free treatment.

Local health departments keep service fees

Local and district health departments retain 90% of fees collected for foundational public health services. They can use the money for operations, services, and employer contributions to the Kentucky Employees Retirement System. This retention rule does not itself change household fees.

Medicaid sets timely and fair payments

Kentucky must make 12 monthly payments each fiscal year to contracted Medicaid service vendors. Payments due that year cannot be delayed or moved into a later fiscal year. Medicaid and the Children's Health Insurance Program must pay pharmacists at least what other nonphysician practitioners receive for similar clinical services. Services must be within the pharmacist's scope of practice. The law provides $128,100 in 2026–2027 for implementation, including a pharmacist provider type.

State health plan can reuse balances

The Finance and Administration and Personnel cabinet secretaries may use prior-year excess health plan funds for 2022–2025 claims or expenses. State Group Health Insurance Plan Year 2021 closes on June 30, 2026, with its balance transferred to Plan Year 2022. After that date, income and expenses tied to 2021 go through the 2022 account. These accounting rules do not create a separate cash payment to plan members.

State psychiatric hospitals receive funding share

After publication, 92.3% of the annual federal mental-disease disproportionate-share hospital funding limit is directed to state-operated mental hospitals. State hospitals can receive more if psychiatric-pool money remains after private psychiatric hospitals reach their hospital-specific limits. State hospitals cannot exceed their own hospital-specific limits. This allocates hospital funding, not direct household benefits.

Tobacco funds support state health programs

The Health Care Improvement Fund receives $13.5702 million in 2026–2027 and $10.0468 million in 2027–2028. The money comes from Phase I tobacco settlement payments and lapsed funds. It supports the health initiatives named in that part of the law. This appropriation does not set household eligibility or individual benefit amounts.

Adult education keeps unspent state money

The Office of Adult Education must carry its General Fund appropriation forward at each fiscal year's end. The money does not expire at year-end. This preserves program funding, not a direct payment to adult learners.

College boards can sell major assets

Postsecondary governing boards can sell or dispose of real estate or major equipment. Proceeds must be divided in proportion to the funding sources used to buy those assets. The law does not create household payments.

Funding replaces the unemployment insurance system

The Service Capacity Upgrade Fund can collect up to $68 million to replace Kentucky's unemployment insurance system. The Office of Unemployment Insurance must report quarterly on progress and spending beginning May 1, 2026. The law does not change benefit amounts or who qualifies.

Public employers get pension cost support

Annual baseline pension subsidies in 2026–2027 and 2027–2028 provide $332,100 for Non-P1 state agencies, $18.8821 million for Regional Mental Health Units, and $25.1513 million for health departments. Each group’s 2019–2020 baseline support is divided using creditable compensation reported to the Kentucky Public Pensions Authority. Another $19.4925 million yearly helps participating employers cover retirement costs above their adjusted 2019–2020 baseline contributions. Adjusted baselines are posted under the Legislative Research Commission website’s 2026 Budget Bills tile; these subsidies do not set individual pension benefits.

Retraining grants for large manufacturing employers

Beginning July 1, 2026, Bluegrass State Skills Corporation training grants receive $2.4 million for 2026–27 and $2.325 million for 2027–28. Manufacturers must have industry code 336111, 336112, 336120, or 336211. They must employ at least 10,000 full-time workers at one facility or multiple facilities in the same county. Grants support manufacturing-related investment and offset workforce retraining costs. Unspent grant money from 2025–26 and 2026–27 carries forward.

School districts keep minimum state funding

Each district is guaranteed at least its fiscal year 1991–1992 SEEK state funding per pupil. That floor remains when insufficient SEEK funds trigger covered allotment reductions. The law also transfers accumulated Common School Fund earnings to SEEK each fiscal year. These rules support district funding, not direct payments to families.

School funding counts kindergarten pupils fully

Kindergarten pupils count fully for the school year in state funding based on average daily attendance. Districts receive half the state share of the average statewide guaranteed base funding for each qualifying early graduate. Early graduates must qualify under Kentucky's early-graduation law. Districts whose calendars suffered from construction or major renovations can request transportation data from two years earlier. They cannot be required to use a figure that lowers their calculated transportation funding.

Schools get pilot and leadership support

The law provides a one-time $1 million allocation in each budget year for Star Academy pilots within existing public schools. It also creates a state program to develop and mentor new principals. That program receives a one-time $1 million allocation in each of 2026–2027 and 2027–2028. The Department of Education must apply for all available federal remedial education grants. Applications do not guarantee grant awards or specific student services.

Universities can refinance qualifying debt

Universities can refinance qualifying debt issued through a nonprofit corporation, city, or county. University rental or use payments must substantially cover the debt payments. Refinancing cannot increase the debt principal or university rental payments. University funds used for the debt remain subject to state-fund interception under KRS 164A.608.

Export promotion funding for Kentucky businesses

Kentucky expands the federal State Trade and Export Promotion program with $135,000 in 2026–27 and $100,000 in 2027–28. This federal funding supports Kentucky businesses participating in the program. It applies from July 1, 2026, through June 30, 2028. The law does not state each business's funding amount or additional eligibility rules.

Child support pursued during state care

For children in juvenile court proceedings, the Cabinet must immediately seek child support orders when they enter state custody or Cabinet-placed out-of-home care. Orders favor the Commonwealth, and the Cabinet must enforce them during custody or placement. Collections are used for the child’s benefit under state law. Support actions cannot delay permanent placement planning or decisions about the child’s best-interest placement. The law does not set the support amount.

Lawmakers can restrict weapons in buildings

During the 2026–2028 budget period and ongoing Capitol renovation, the General Assembly can regulate, restrict, or prohibit carrying deadly weapons. This authority overrides KRS 237.115 in buildings or building portions controlled, occupied, or inhabited by the Legislative Branch. The law grants authority to set rules; it does not itself create a statewide weapons ban.

Libraries lose state operating aid

Kentucky provides no General Fund money for library operating aid through its per-capita grants program. Libraries that relied on this nonconstruction aid lose that source of support. The provision does not identify replacement funding.

Park renovation fund transfers blocked

The law blocks transfers to the Park Capital Maintenance and Renovation Fund despite the existing statutory transfer rule. It does not state how much money otherwise transfers to that fund.

State police face assignment limits

Beginning in fiscal year 2025–2026, no more than 25% of covered sworn Kentucky State Police personnel may serve outside post assignments. Positions established under KRS 16.187 and 16.196 are excluded from the calculation. The rule limits police staffing assignments, not household conduct.

Aging service providers retain matching requirement

Organizations contracting with the health cabinet for covered essential aging services must provide a local match. The match must be at least the amount required in 2025–2026. It can include money, materials, commodities, transportation, office space, staff services, or other facility services. The law does not state the required dollar amount or impose a direct household charge.

Veterans nursing home projects face threshold

Future state veterans' nursing home projects cannot be considered until existing homes reach 80% combined bed occupancy. After that threshold, the legislature states its intent to dedicate future federal or state-reallocated beds to Magoffin County. The law does not guarantee a new project or beds.

Education programs lose General Fund support

The law provides no General Fund money for Professional Development, Commonwealth School Improvement, Leadership and Mentor, or Middle School Academic Center programs. Teacher's Professional Growth, Teacher Academies, Writing, Kentucky Principal Internship, and Kentucky Teacher Internship also receive no General Fund money. Kentucky Academy for Equity in Teaching receives none. The stated purpose is to increase funding for school-based mental health providers. This removes that funding source; it does not establish that the listed programs are abolished.

Counties get no jail design reimbursement

The law provides no county reimbursement for architectural and engineering design fees for approved new local correctional facilities. Approval must come from the Kentucky Local Correctional Facilities Construction Authority. Counties receive no reimbursement for those costs under this provision.

Deadline for existing state project funding

Existing line-item construction and technology project appropriations expire June 30, 2026, unless this law renews them or an exception applies. Funding remains available if a construction or purchase contract is awarded by that date. Bond projects also qualify with permanent financing or a short-term credit line and an initial draw in the next biennium. Applicable grant or loan agreements qualify if finalized and signed by all required parties by June 30, 2026.

Development bonds require approval and documentation

Economic development bonds require approval before issuance from the Finance and Administration Secretary and State Property and Buildings Commission. Project selections must be documented for presentation to the Secretary. Documentation must explain the selection reasons and expected economic development effects.

Officials need approval for aircraft travel

Executive Branch cabinet secretaries and other state officials need the State Treasurer’s approval for out-of-state travel on state aircraft. Documentation must show that aircraft use is the lowest-cost option, considering travel costs and time. The Treasurer cannot delegate this approval authority. Requests and supporting records are subject to Kentucky’s Open Records Act.

Police training funds face spending limits

Criminal Justice Training salary and fund-administration reimbursements cannot exceed $42.5519 million in 2026–27 or $43.0007 million in 2027–28. Administrative reimbursement under KRS 15.460(1)(c)3 is capped at $1 million. Kentucky Law Enforcement Council operating funding is capped at $622,900 in 2026–27 and $603,500 in 2027–28. The department cannot transfer Kentucky Law Enforcement Foundation Program Fund money to support the Criminal Justice Council.

Academy students leave home-district funding counts

During the 2026–2028 budget period, three academies' students do not count toward their home districts' school funding attendance. The schools are Craft Academy, Gatton Academy, and Votruba Young Scholars Academy. This lowers the attendance count used for those districts' SEEK funding, not a household payment.

Early childhood council loses reserved funding

Kentucky returns $6.5 million previously set aside for the Early Childhood Advisory Council to the Tobacco Settlement Agreement Fund. The money came from Early Childhood Development Fund appropriations. This removes the amount from the council's available funding. The law does not specify a reduction in any family's benefit.

Educator preparation receives no general funding

The budget provides no General Fund money for Professional Education Preparation. The provision does not state the program's earlier funding level. It also does not identify a specific benefit amount lost by any person.

Model Laboratory School funding is cut

Kentucky reduces the school-funding adjustment for students attending Eastern Kentucky University's Model Laboratory School. The SEEK adjustment falls by $900,000 in 2026–27 and $1.8 million in 2027–28. The law does not specify changes to student services or household costs.

State agencies face job position limits

On July 1, 2026, and July 1, 2027, the Personnel Cabinet and State Budget Director must set each budget unit’s position limit. Those limits follow the enacted budget and authorized adjustments. Filled permanent full-time and other positions cannot exceed the limit. Extra positions require an agency-head request and Budget Director approval before the Personnel Cabinet Secretary authorizes employment.

Court advocate funding with fee limits

From July 1, 2026, through June 30, 2028, the law provides $12.3483 million annually for covered court-appointed guardian ad litem fees. Courts set those fees, capped at $500 per appointment under the laws listed in the act. Court-Appointed Special Advocate programs also get $3 million in grants in each budget year. Those grants cannot pay administrative costs.

Longer window for state prisoner transfers

Eligible state prisoners can be transferred to state institutions within 90 days after final sentencing. The county jail must not object to the extra 45 days. The rule excludes Class C and Class D felons who qualify to serve their time in county jails.

Providers can end unfilled bed contracts

Providers can choose to end contracts for beds that remain unfilled on the law’s effective date. This releases providers from those contracted bed obligations but can reduce contracted capacity. Providers decide whether to use this option.

Religious protections and substitute service providers

Community Based Services contracts cannot interfere with a contractor’s religious freedom. Contracts must allow substitute providers when sincerely held religious beliefs prevent a contractor from providing a service. The substitute must be licensed or approved by the Cabinet. This protects contractors while allowing families’ services to be handled by another provider.

Jefferson funds reserved for early childhood

From July 1, 2026, through June 30, 2028, Jefferson County must use all distributions under KRS 42.470(2)(a) for Thrive By Five Louisville. The Jefferson County Fiscal Court must direct that money to the program. The law does not state a dollar amount, individual eligibility rules, or household payments.

Local school taxes support equalized funding

Districts can levy a local tax that raises up to 17.5% of their SEEK-guaranteed revenue. Levy revenue is equalized at 150% of the statewide average per-pupil property assessment. Districts choosing this levy must impose it by October 1 of each odd-numbered year. The levy supports school funding but can increase local taxpayers' costs.

School construction aid with borrowing limits

Critical school construction receives $10.1368 million in 2026–27 and $9.7818 million in 2027–28 for districts qualifying under KRS 157.621(5). The law also reallocates $23.691 million in previously authorized bond funds to the commission's 2024–26 Offers of Assistance. From July 1, 2026, through June 30, 2028, the commission can make an additional $40 million in assistance offers. Districts must submit required information and complete the Kentucky Facilities Inventory and Classification System evaluation before receiving offers during that biennium. Related borrowing is barred during 2026–28; the additional offers anticipate debt-service funding in 2028–30.

School family centers face overhead limits

Family Resource and Youth Services Center funding transfers to the Cabinet for Health and Family Services each fiscal year. The Cabinet can use no more than 2% of transferred funds for administration. Center rules also limit administrative use to 2% of total funds transferred from the Department of Education. Certified center directors and coordinators keep their certified school district employee status.

Vocational rehabilitation gets first cafeteria opportunity

The Office of Vocational Rehabilitation gets the first opportunity to provide food services in two specified Frankfort state office buildings. A state agency cannot hire a nongovernmental operator unless the office first declines in writing. The rule changes contracting priority without specifying wages, jobs, or individual benefits.

Youth Challenge schools use separate funding

Students in Kentucky Guard Youth Challenge programs do not count toward SEEK average daily attendance. Those programs cannot receive SEEK distributions. Districts providing their education services must be paid solely from the law's separately specified General Fund appropriation.

Coal counties gain flexible assistance spending

From July 1, 2026, through June 30, 2028, 70% of Local Government Economic Assistance Fund money goes to coal-producing counties. Each county’s share follows its portion of coal severed statewide. Non-coal counties receive none of that 70% portion. During the same period, local governments no longer have to spend these appropriations on coal haul roads.

Convention center corporation manages its renovation

The Northern Kentucky Convention Center Corporation may manage the center’s renovation and modernization on the state’s behalf. Its authority covers planning, design, purchasing, construction, administration, and completion, replacing the Finance and Administration Cabinet in those roles. The cabinet secretary retains authority over project protests and disputes under KRS 45A.285.

Dedicated funds shift to general spending

Kentucky transfers money from dedicated funds to the General Fund, leaving less for those funds' other uses. The Environmental Protection Insurance Administration Fund supplies $24 million in 2026–27 and $26 million in 2027–28. The Medical Cannabis Agency Fund supplies $10.4 million in 2027–28. Criminal Justice Training funds supply $2.368 million each year for debt payments on a previously authorized capital project. Together, these transfers total $65.136 million.

Governments cannot mandate electric vehicle purchases

State agencies, departments, air pollution control districts, and local governments cannot mandate electric vehicle purchases. Vehicle purchase requests for proposals also cannot be limited to electric vehicles only. The law removes those purchasing mandates while restricting government purchasing rules. It does not require households to buy or avoid electric vehicles.

Rural infrastructure fund closes new contracts

The Rural Infrastructure Improvement Fund cannot make new contracts after June 30, 2026. Kentucky Infrastructure Authority contracts executed before that date remain active only to pay claims. Funds not committed as of June 30, 2026, and unspent General Fund amounts return to the Budget Reserve Trust Fund Account.

Shortfall cuts adjust aid with safeguards

These rules apply when a General Fund revenue shortfall of 5% or less triggers the budget reduction plan. The state must adjust the Local Government Economic Assistance and Economic Development funds to revised receipt estimates. Specific appropriations expressing legislative intent cannot face a larger percentage cut than their budget unit’s General Fund appropriation. That safeguard limits cuts but does not prevent them.

State partnerships need approval with exceptions

Public-private project delivery requires General Assembly approval when estimated project costs reach $1 million. Exceptions apply to specified State Fair Board and University of Kentucky projects. The State Fair Board can use this method without explicit legislative approval for projects estimated to cost at least $25 million. The law does not establish project awards or cost savings.

State spending faces approval and caps

In 2026–2027 and 2027–2028, budget units may spend excess restricted or federal receipts only after statutory procedures and approvals. The State Budget Director must authorize spending, and the Finance and Administration Cabinet Secretary must approve it. Before excess restricted-fund spending, officials must assess the General Fund Surplus Account and may redirect money there if it cannot cover necessary expenses. During the first half of 2027–2028, state officials cannot spend or commit more than 50% of this law’s appropriations in total. A declared emergency lifts that cap.

Tobacco funds adjust and shift destinations

Phase I tobacco settlement appropriations rise or fall when actual payments differ from official estimates. Debt service, the Attorney General, and the Department of Revenue are exempt from adjustment. Adjustments are split 50% to agricultural development, 30% to early childhood development, and 20% to health care improvement. Separately, $6.5 million previously assigned to the Early Childhood Advisory Council returns to the Tobacco Settlement Agreement Fund. The law does not specify the final use of that returned money.

State agencies can refinance limited debt

Specified state agencies may refinance existing appropriation-supported debt paid through Commonwealth lease-rental payments. Refinancing cannot increase principal or extend the debt term. Agencies must follow reporting rules for the Capital Projects and Bond Oversight Committee. The law does not guarantee savings or specify a refinancing amount.

Employer funding rates for state retirement

For work performed July 1, 2026, through June 30, 2028, the Kentucky Employees Retirement System employer contribution rate is 18.83%. The State Police Retirement System employer rate is 54.33%: 51.84% for pensions and 2.49% for health insurance. These rates apply regardless of when employees are paid. By May 1 before each budget year, the Budget Director must determine initial liability rates for nonhazardous Executive Branch employees. Those rates include a 7.76% normal-cost contribution and must cover each employer’s share of accrued liabilities; they are not employee contribution rates.

Kentucky university gains options and liabilities

The University of Kentucky or an affiliate may assume leases, debts, and liabilities from mergers, acquisitions, or partnerships authorized in the 2026–2028 budget. Those deals must support its education, healthcare, research, or service mission; lease and debt assumptions require oversight reporting. The university may use public-private partnerships for projects costing at least $25 million without explicit General Assembly authorization. The Capital Projects and Bond Oversight Committee must approve those projects after negotiations and before work starts.

Schools gain spending flexibility with limits

Districts can use Extended School Services and Safe Schools funds for general operating costs in both budget years. They must still follow the programs' governing laws and serve their intended students. Districts must report each program's operating spending to state education officials and the legislature's education committee. School boards can also reduce covered allocations to individual schools. The allocation covered by the specified minimum cannot fall below $100 per pupil in average daily attendance.

Coal taxes support two local funds

From July 1, 2026, through June 30, 2028, eligible coal severance and processing tax revenue follows a 70%–30% split. The Local Government Economic Development Fund receives 70%; the Local Government Economic Assistance Fund receives 30%. Transfers occur in July, October, January, and April, using actual revenue from the previous quarter. Collections identified in the law's separate subsection (2) are excluded from this split. This allocates tax money between local funds; it does not change household tax rates.

Sponsors & Cosponsors

Sponsor

Jason Petrie
Republican • House

Cosponsors

Adam Bowling
Republican • House
Josh Bray
Republican • House
Kim Banta
Republican • House

Roll Call Votes

All Roll Calls

Yes: 336 • No: 64

Senate vote • 4/14/2026

passed

Yes: 32 • No: 6

House vote • 4/14/2026

passed

Yes: 74 • No: 19

Senate vote • 4/1/2026

passed

Yes: 38 • No: 0

House vote • 4/1/2026

passed

Yes: 73 • No: 21

Senate vote • 3/18/2026

3rd reading, passed

Yes: 38 • No: 0

House vote • 2/26/2026

passed

Yes: 81 • No: 18

Actions Timeline

delivered to Secretary of State (Acts Ch. 168)
4/14/2026
enrolled, signed by President of the Senate
4/14/2026House
enrolled, signed by Speaker of the House
4/14/2026House
received in House
4/14/2026House
passed 32-6
4/14/2026Senate
vetoes overridden in-part
4/14/2026Senate
posted for consideration of Governor's line vetoes
4/14/2026
to Rules (S)
4/14/2026Senate
received in Senate
4/14/2026Senate
passed 74-19
4/14/2026House
vetoes overridden in-part
4/14/2026House
posted for consideration of Governor's line vetoes
4/14/2026
taken from Rules
4/14/2026House
to Rules (H)
4/14/2026House
received in House
4/14/2026House
line items vetoed
4/13/2026
delivered to Governor
4/1/2026
enrolled, signed by President of the Senate
4/1/2026House
enrolled, signed by Speaker of the House
4/1/2026House
passed 73-21
4/1/2026House
Free Conference Committee report adopted in House
4/1/2026House
posted for passage for consideration of Free Conference Committee Report
4/1/2026House
taken from Rules
4/1/2026House
to Rules (H)
4/1/2026House
received in House
4/1/2026House

Bill Text

Current
4/14/2026
PDF
Introduced
1/20/2026
PDF

Related Bills

Back to State Legislation

How does this bill affect your finances?

Bill Overview

Analyzed Economic Effects

High Impact

Health account money for public employees

Retired teachers get state health support

Training incentives and State Police overtime

Training payments for law enforcement workers

School funding and transportation for students

Funding for Medicaid provider payments

School employee retirement and teacher supplements

Medium Impact

Child care help for working families

Childcare providers get income-counting relief

Deaf-blind waiver participants gain service access

Emergency help and services for veterans

Faster foster approval for kin caregivers

Health funding preserved for school employees

Medicaid plans must provide lung screening

More Medicaid home care waiver slots

Six-month child care help for families

Survivor benefits for public safety families

College students get continued aid funding

Raises funded for qualifying public defenders

School speech specialists get extra pay

Two raises for eligible state employees

Funding for emergencies and Guard deployments

Funding for Kentucky streams and hatchery

Funding for psychiatric hospitals and services

Funding for preschool and student support

State support for school building levies

Kentucky funds two conference center projects

Loan funding for community water systems

Funding supports rural health care providers

More school and community nutrition funding

Community colleges get facility project funds

Eligible districts get school building support

Funding for students' career training programs

Public universities get building upgrade funds

Limits on students’ pandemic tuition lawsuits

Governor must address remaining budget shortfalls

Kentucky pays more SNAP operating costs

State agencies face operating cost controls

Budget shortfalls trigger transfers and cuts

Rules for state shortfalls and surpluses

Highways get surplus funds, face cuts

Medicaid vendor cuts fund higher rates

Low Impact

Kin caregivers can request custody changes

Travel help for Medal of Honor recipients

Brain injury support grants for veterans

Married state workers can share coverage

Specialty care funding for disabled people

Support for youth leaving foster care

Eligible students get exam cost help

Funding for prepaid tuition and refunds

Park workers can keep full-time status

Special schools gain state technology access

Veterans Center staff keep premium pay

Kentucky businesses get hotel contract preference

Annual money for state park upkeep

Correctional treatment centers get payment floor

Corrections can receive extra overrun payments

Counties get jail and corrections support

Funding for conservation programs and districts

Funding for Jefferson youth detention centers

Funding for recovery and drug programs

Funding for shelters and victim services

Funding for two justice programs

Funding supports Gateway youth diversion

Kentucky funds forensic labs and examiners

Kentucky funds park and visitor-facility upkeep

Kentucky funds tobacco manufacturer enforcement

New ranges for police training

Old State Capitol gets preservation funding

Operating support for Family Scholar House

Payments continue for sentencing credit programs

Police get training and equipment funding

Prisons and counties get medical funding

State funding for Mary Kendall Homes