House Advances Biennial Budget
February 26, 2026The Kentucky House approved its version of 26RS HB 500, the Commonwealth’s biannual budget, on Thursday, February 26th. The current version, which adopted a committee substitute, differs from the earlier, more “bare bones” version filed earlier in the legislative session.
Representative Jason Petrie (R-Elkton) reiterated that this was designed differently than in years prior and believes that the process utilized this biennium was the most transparent in decades. He stated this is a good first draft that focuses on the Commonwealth’s “needs” and not their “wants,” which slowed the spending growth rate to 2%. He also added that long-term economic projects will be examined in future appropriation bills.
HB 500 will enact broad-based cuts of 4% in FY 2027 and 3% in FY 2028, with several critical units being exempted. These units include:
Defined calculation costs (i.e., Commonwealth Office of Technology (COT) rates, governmental insurance, and other essential operational expenses).
Department of Corrections, Public Safety, and Juvenile Justice.
Veterans Affairs.
Medicaid.
Family Resource Centers.
Salary increases of 2% in both fiscal years are provided for all executive branch employees, constitutional officers, and elected officials. Support Education Excellence in Kentucky (SEEK) will increase in both fiscal years from FY 2026 levels, and an allocation of nearly $400 million in SEEK transportation funding is also provided. The 5% cap on required employer contribution rates for the State Employee Group Health Insurance Plan was removed.
Allocations that impact Kentucky cities include:
Kentucky Law Enforcement Foundation Program Fund (KLEFPF) payments of $4,653 in FY 26-27 and $4,748 in FY 27-28 for each full-time participant, and $2,377 in FY 26-27 and $2,373 in FY 27-28 for each part-time participant. This represents a 2% increase from FY 25-26.
Firefighters Foundation Program Fund (FFPF) payments of $4,653 in FY 26-27 and $4,746 in FY 27-28 for each qualified professional firefighter. This represents a 2% increase from FY 25-26.
$15,300 in each fiscal year for each qualified volunteer fire department.
$10 million in each fiscal year for the Body Armor Grant Program.
Federal funds of approximately $213 million are provided in each fiscal year for the Rural Health Transformation Fund.
$1.44 million in FY 26-27 and $1.395 million in FY 27-28 for Operation Unite. A budgetary reduction from prior fiscal years.
$600,000 in each fiscal year for statewide law enforcement support that includes the acquisition of mobile data terminals and docking stations. This line-item appropriation negatively impacts local law enforcement by using restricted KLEFPF dollars to provide fiscal support for the Kentucky State Police (KSP).
Provides for CPI salary adjustments for state police in the amounts of $3.8 million from the General Fund and $1.8 million from the Road Fund in FY 2026-27 and $7.4 million from the General Fund and $3.7 million from the Road Fund in FY 2027-28.
$6 million in FY 26-27 for Flood Control Local Match.
The House approved the budget on a vote of 81-18 and will now be sent to the Senate for its consideration. Rep. Petrie reminded the House members that the biennium budget will be reevaluated again in the House after the Senate approves its version.
A graphic highlighting the line items that impact Kentucky cities can be found here.
