Week in Review: Preparing for the 2026 Biannual Budget
Without a doubt, the most important responsibility of the Kentucky General Assembly is the drafting of the commonwealth’s biannual budget. Like the federal government, all proposed appropriations and budgetary measures must originate in the House of Representatives.
However, this does not mean my colleagues and I do this work alone. Quite the contrary in fact, as we meet throughout the legislative interim alongside our fellow lawmakers in the Senate as members of budget review (BR) subcommittees under the larger Interim Joint Committee (IJC) on Appropriations and Revenue. In total, there are six of these subcommittee which each focus on a different area of our commonwealth, review their financial needs, and hear their requests from the next budget. Of course, we also receive information and input from countless stakeholders, including state agencies and advocacy groups.
This week, these budgetary committees met and discussed a wide variety of topics. I have included summaries of those meetings here, however more information can be found on our website at legislature.ky.gov. Additionally, you can watch these meetings live via KET, YouTube, or follow along on our social media pages @KYHouseGOP.
IJC on Appropriations and Revenue: Members heard from legislative staff on the commonwealth’s budget trends, disaster response, and current economy. General Fund appropriations have seen a significant transformation, experiencing a 40% increase since the COVID-19 pandemic. Presenters highlighted the aim for a period focused on sustainability, resilience, and strategic investments. A substantial portion of general funds are directed towards K-12 education and Medicaid, with the latter seeing a total per-person increase of $615 to $1,034 since the pandemic began. The state’s financial health is further strengthened by the growth of the Budget Reserve Trust Fund, which has grown from nothing in 2011 to a $3.5 billion today. This growth has enabled significant one-time investments across various sectors, including transportation projects, economic development, sewer and water grant programs, local government support, hospitals, postsecondary education, and a substantial allocation of $3.1 billion towards unfunded liabilities in the state retirement system.
BR Subcommittee on Economic Development, Tourism, and Environmental Protection: Members met to hear from the Cabinet for Economic Development on job and business growth across Kentucky. The committee received an update on the Kentucky Product Development Initiative that aims to fund site development and infrastructure across the Commonwealth by supporting local government. Members also heard about progress the cabinet has been making on enhancing economic growth and bringing jobs to Kentucky. The cabinet gave suggestions on how the legislature could further support economic development in Kentucky.
BR Subcommittee on General Government, Finance, Personnel, and Public Retirement: Members heard from a number of our commonwealth’s constitutional officers and their offices to review their budgets and receive updates regarding their activities. First, Secretary of State Michael Adams stated that his office remains self-sustainable and requested no appropriations be made during the next budget cycle. Next, the office of the attorney general reported on their distribution of over 2,000 protective vests to law enforcement officers, and their continuous efforts to effectively prosecute violent crime and domestic violence. Finally, Commissioner of Agriculture Jonathan Shell provided updates regarding the office of agriculture policy, and requested additional funding in order to increase recruitment and retention for the department.
BR Subcommittee on Justice and Judiciary: Members met to hear from the Department of Juvenile Justice and the Department of Corrections regarding their proposal for a high-acuity mental health facility in order to better treat youths who have severe mental illnesses which require hospitalization. The design and construction phase of the facility are estimated to cost $35 million with the operating budget estimated to be $12.1 million. Members also heard testimony regarding Well Path, a comprehensive medical provider contracted by the commonwealth, and their recent financial reorganization.
BR Subcommittee on Education: Members heard from the commonwealth’s public postsecondary institutions regarding their compliance with House Bill 4, a measure which was passed during this past legislative session to prohibit diversity, equity, and inclusion (DEI) from higher education. The university’s highlighted the elimination or repurposing of staff, resources, and programs prohibited by the law. The Kentucky Community and Technical College System indicated that the elimination of programs and sponsorships will save $2.5 million annually.
BR Subcommittee on Transportation: Members received an update about how funds allocated to the Department of Aviation from HB 1 of the 2024 Regular Session are being used to support airport projects, such as hangar construction. Members also received an overview of public riverport projects, ranging from equipment replacement to asset revitalization. Lastly, members received an overview of Kentucky’s electric vehicle charging program. The Kentucky Transportation Cabinet discussed the impact of the Unleashing American Energy executive order on the program, as well as the impact of EV ownership fees and EV power excise taxes on the state road fund.
Budget Review Subcommittee on Health and Family Services: Members of the Budget Review Subcommittee for Health and Family Services convened to provide budgetary oversight on projects aimed at protecting the safety of our senior citizens and encouraging public health improvements across the Commonwealth. Specifically, committee members were briefed on the status of three ongoing initiatives: long-term care certification surveys; the Public Health Transformation Initiative; and the Central Lab Expansion Project.
As always, I can be reached anytime through the toll-free message line in Frankfort at 1-800-372-7181. You can also contact me via email at Chris.Freeland@kylegislature.gov and keep track through the Kentucky legislature’s website at legislature.ky.gov.