Kentucky cities will have two separate opportunities to secure state transportation funding this summer through the Local Assistance Road Program (LARP) and the newly created Grant Pool Program. While both programs are administered by the Kentucky Transportation Cabinet's Department of Rural and Municipal Aid, they serve different purposes and have different eligibility requirements. 

​Local Assistance Road Program (LARP) 
Background and Key Features of the LARP Program
 2025 House Bill 546 established LARP to provide an additional option for cities and counties to secure state funding for road projects. The program is designed to help local governments address key transportation needs. LARP is focused on the rehabilitation of existing roads, such as repairs and resurfacing. It does not fund improvements, such as projects that create new roads or expand the capacity of existing roads. 

How Much Funding is Available?  
In 2026 House Bill 501, the Kentucky State Transportation Biennial Budget, the General Assembly allocated LARP $70.2 million for FY 2026-27 and $20 million for FY 2027-28. This is a substantial increase from the allocation of $23.9 million in FY 2025.  

Application Period and Funding Timeline 
The application period runs from June 1 to October 1, 2026. Cities may apply using application TC 20-46. Projects must include detailed location information. Be sure to include the full project length and mile points (check KYTC Local Maps). Limit each project to $500,000, but you can submit multiple projects. Include photos of every 300 feet of the road (about 17 photos per mile). Remember: only rehab projects are awarded, no new lanes or capacity improvements.

After the submission period closes, the Department of Rural and Municipal Aid will evaluate applications using a standardized scoring system based on safety, congestion relief, asset management, and cost effectiveness. To qualify, projects must be scored as high priority—earning a rate of 8, 9, or 10—and must be itemized and approved by the General Assembly. 

By November 1, the department will provide a ranked list of recommended projects to the legislature. The legislature will then pass a resolution listing projects that were approved for awards of LARP funds. 2026 House Joint Resolution 76 provides the list of projects that were approved by the state legislature this past session. HJR 76 lists awards by county, including city awards. The full list of FY 2026 LARP city projects awarded can be found here.  

Local Match Requirement  
Every LARP project requires a local funding match, determined by a formula created by the Kentucky Cabinet for Economic Development based on county population and growth trends. Municipal Road Aid funds can be used for the LARP local match. Find your city’s local match requirement here.   

Need Additional Information?
Join us with Kentucky Department of Rural and Municipal Aid Commissioner Bobbi Jo Lewis for an important informational webinar regarding LARP updates on Tuesday, June 23, 2026. Register and read more here. 

HB 501 Grant Pool for Cities and Counties 
Background and Key Features of the Grant Pool 
2026 House Bill 501, Kentucky’s transportation budget appropriations, includes a $24 million appropriation for fiscal years 2026-2027 for a grant pool for cities and counties. The Grant Pool is administered by the Department of Rural and Municipal Aid. Excluding Lexington and Louisville, each city that serves as a county seat is eligible to receive up to $100,000 in each FY. In the event a county seat does not apply for or exhaust its full allocation within the FY, any remaining funds specifically allocated to the county seat can be made available to other incorporated cities in the county. Each county shall receive up to $100,000 in each FY. However, any county containing a consolidated local government, an urban-county government, or a county government whose seat is not a unified city, is eligible to receive up to $200,000 in each FY. 

Eligible Projects 
Cities can apply for a grant only for projects located on a city road. Authorized projects include, but are not limited to, city and county road improvements, construction of new routes, sidewalk construction and repair, multimodal transportation projects, and pavement resurfacing.  

Local Match Requirement 
All grant applications must include the project and the estimated project cost. Grants require a dollar-for-dollar local match. Municipal road aid funding cannot be used for the Grant Pool local match requirement.  

Application and Funding Timeline 
Grant Pool funding becomes available beginning July 1, 2026, and will remain available through June 30, 2027. Cities may apply using application TC 20-47.

Need Additional Information? ​​
KLC anticipates additional information will be provided by the Department of Rural and Municipal Aid in coming weeks.  

Cities are encouraged to evaluate both opportunities and determine which program best aligns with their transportation priorities and available local matching funds. 

KLC will continue to provide updates as additional guidance becomes available from the Kentucky Transportation Cabinet and the Department of Rural and Municipal Aid.