Kentucky Senate President Robert Stivers, R-Manchester, reviews the Senate chamber on March 18, 2026. (Kentucky Lantern photo by Liam Niemeyer)
FRANKFORT — The GOP-controlled Kentucky Senate unanimously approved its version of the two-year state budget on Wednesday. The plan allocates less funding for public schools than the House proposal but significantly increases Medicaid funding while cutting budgets for several state agencies.
Lawmakers also passed budget bills funding the legislative and judicial branches, along with a separate bill allocating $810 million from the Budget Reserve Trust Fund for one-time spending. Officials have not specified how those funds will be used. The “rainy day” fund currently holds billions in surplus revenue from recent years.
Senate Appropriations and Revenue Committee Chair Chris McDaniel, R-Ryland Heights, told lawmakers that the legislature has crafted budgets during both difficult and stable times.
“I could not be more proud of our current and past members because we did things with discipline. We made tough decisions when we had to. We crafted our budgets for the future, not just for today,” McDaniel said.
Democrats joined the GOP supermajority in passing the budget bills, continuing a pattern seen during the 2024 budget process. Senate Minority Floor Leader Gerald Neal, D-Louisville, thanked McDaniel for meeting with Democrats earlier in the day to address their questions.
“I think that’s where the process should go. We look forward to continuing this process,” Neal said.
The Senate moved the 228-page budget swiftly through committee and approved it on the same day. Lawmakers made the bill publicly available only hours before the vote.
The League of Women Voters of Kentucky criticized the rapid process, calling it a lack of transparency that limits public input.
McDaniel defended the timeline, saying lawmakers must act quickly due to the complexity of budget development and limited time remaining in the legislative session, which has 10 working days left.
“Even when you’re negotiating with people of the same party, it will take us a while to get through it. And simply, with the amount of time that’s left, we’ve got to move this thing along quickly,” McDaniel said.
The Kentucky House previously passed its version of the budget last month. Lawmakers must now reconcile differences before sending a final version to Gov. Andy Beshear.
State budgets typically reach final agreement through House-Senate conference committees that negotiate behind closed doors.
The Senate version of the budget
The Senate’s version of House Bill 500 reduces school funding compared to the House proposal and falls short of the governor’s recommendation.
The plan allocates $4,626 per student for fiscal year 2026–2027 and $4,774 per student for 2027–2028 through the SEEK formula, slightly below House levels.
By comparison, Beshear proposed $4,701 per student for 2026–2027 and $4,818 for 2027–2028.
The Senate budget keeps transportation funding for school districts flat, similar to the House plan, but restores higher education funding cuts proposed by the House.
McDaniel said several state agencies will see budget reductions of at least 4%, though lawmakers exempted areas such as Kentucky State Police, juvenile justice, prisons, prosecutors, public defenders, and teachers’ pensions.
Overall, the Senate budget allocates $31,011,874,600 in General Fund revenue, about $34 million more than the House proposal.
The plan also includes a 13th check for state retirees, funded by a portion of $350 million drawn from the Kentucky Insurance Regulatory Trust.
Kentucky Government Retirees, representing about 20,000 retirees and active employees, said it was “gratified” to see the additional payment included.
Jason Bailey, executive director of the Kentucky Center for Economic Policy, said the budget makes “modest improvements” but still underfunds K-12 education.
The think tank found that the Senate maintains Medicaid funding at roughly the same level as the governor’s proposal, unlike the House, which included deeper cuts.
Bailey argued that continued tax cuts have reduced revenue needed to support essential services.
“Thankfully, the Senate budget does not substantially underspend relative to revenue in an attempt to trigger more tax cuts in the future. But as the underfunding of education and deep cuts to the bases of many agencies prove, years of tax cuts have already resulted in revenue that is too low to meet the needs of Kentuckians.”
“As the House and Senate reconcile their budgets in the coming weeks, they should work toward a version that uses a responsible portion of the massive Budget Reserve Trust Fund to make greater targeted investments in the services needed to make Kentucky healthier and safer and our communities stronger.”
McDaniel said the proposal would leave about $3.9 billion in the Budget Reserve Trust Fund.
A fast-moving process
Lawmakers acknowledged the rapid pace of the budget process, noting that many had limited time to review the full bill.
Sen. Jared Carpenter, R-Berea, said Wednesday morning that he had not yet reviewed the bill in detail.
“Our folks have been working on this thing for several weeks, way up in the night, to try to get it to a process now to where we can look at it and vote on it, have an understanding of it,” Carpenter said.
Neal reiterated concerns about transparency, echoing comments he made during the 2024 session.
“We are confident of that, but we got to scrutinize the budget more carefully,” Neal said.
Sen. Gex Williams, R-Verona, predicted the budget would likely move to a conference committee, where final decisions would be made by legislative leadership.
“There can be huge swings between what we saw today. Not that there could be — there will be,” Williams said. “Even to senators and reps it’s a little bit of an opaque experience.”
“You put everything in, but it’s those guys that are in the leadership — they’re behind closed doors at the time, and they both come out and blame it on the other leadership,” Williams said. “That’s the way it’s worked. That’s the way it’s always worked.”
With a large volume of legislation still pending, Williams added that the process would benefit from starting earlier and allowing more time for review.
Leave a Comment