SENATE APPROVES DISCIPLINED,
BALANCED STATE BUDGET PROPOSAL
Conference committee likely to be formed to determine final budget decisions
FRANKFORT, Ky. (March 18, 2026)— The Senate has returned an amended version of House Bill (HB) 500, the commonwealth’s two-year executive branch budget plan, to the state House of Representatives for consideration. The bill was approved unanimously by the full members, both Democratic and Republican.
The budget bill with Senate revisions is balanced and forward-looking, and puts Kentucky taxpayers first.
It maintains structural integrity without relying on one-time dollars for recurring expenses, preserves strong reserve levels while enabling strategic one-time investments through House Bill 900, and prioritizes reducing long-term liabilities alongside funding essential government services.
The proposal largely aligns with the House framework while sustaining key investments in education, including SEEK funding, school safety, student support services and workforce initiatives, and maintaining core commitments to Medicaid, behavioral health and vulnerable populations. It fully funds pension and health obligations, supports state employees and public safety personnel, and continues investments in infrastructure, higher education and facility maintenance.
The Senate plan also includes targeted enhancements such as additional support for postsecondary performance funding, school innovation and construction, Medicaid cost containment and provider reimbursement improvements, pension liability reduction, a one-time retiree payment, and increased support for public safety, local governments and corrections. Further investments advance energy development, disaster response capacity, technology modernization and cybersecurity, while strengthening oversight, budget flexibility and fiscal discipline, maintaining significant reserves and a low debt ratio to ensure long-term financial stability.
"The Senate’s budget proposal reflects a disciplined approach to governing," said Senate budget chair Chris McDaniel, R-Ryland Heights. "We fully fund our obligations, protect critical services and make targeted investments while maintaining a structurally balanced budget. We are reducing long-term liabilities, preserving strong reserves and ensuring taxpayer dollars are used responsibly—not just for today, but to secure the commonwealth’s financial future.”
The Senate also approved HBs 503, 504, and 900, measures supporting operations of the legislative and judicial branches of government, as well as identifying $810 million in funds from the state's budget reserve trust fund to be utilized for one-time transformative funding or projects across the commonwealth.
Because the Senate adopted changes, these bills will now return to the House for further consideration. Lawmakers from both chambers will continue working together in the coming days to finalize a two-year budget that meets the needs of Kentuckians while protecting the commonwealth’s long-term financial health.