Session enters the veto recess, legislators talk final version of budgets

The bulk of the 2026 session of the Kentucky General Assembly is behind us, with only two days remaining following the veto recess, and legislators were able to pass a two-year budget before that time passed.

In fact, several spending plans were passed, including the Executive Budget, the Judicial and Transportation Budgets, and a one time spending bill that carried a hefty price tag of $1.7 billion. That one time spending bill is set to fund over 300 projects across the Commonwealth, and some of them are local, with Representative Walker Thomas saying it includes a waste-water project in Oak Grove, funding for a regional radio system for first-responders and smaller projects across the region.

The budgets also make way for two-percent raises for state employees in both fiscal years, an increase in SEEK funding, and Senator Craig Richardson says he was happy to see them meet their obligation for Medicaid. He says he keeps hearing about cuts to Medicaid, but Richardson says that’s not the case.

The spending plans don’t come without their hardships however, as many agencies and systems will be hit by budget reductions, such as the Judicial branch, which says the specialty courts will suffer from the cuts. Senator Richardson says the problem is, federal funding is drastically reduced this time around, so everyone is going to feel some pain from that, as they had to adjust for that loss in funding.

Representative Thomas says some areas won’t be affected by those cuts, such as education, corrections, veterans affairs and several others.

It’s looking likely that the state won’t hit the trigger thresholds to continue seeing the income tax reduce in 2027, so that rate will likely stay at 3.5 percent if those thresholds aren’t met.