Kentucky Governor [Name] signed the state’s $31.8 billion biennial budget into law Friday at the State Capitol in Frankfort, capping a legislative session that ended two days ahead of schedule — a rarity in Frankfort — with the budget passing both chambers with bipartisan support.
The spending plan covers fiscal years 2027 and 2028 and includes what legislative leaders are calling the largest infrastructure investment in state history, $2.1 billion for roads and bridges, much of it directed toward Eastern Kentucky projects still recovering from the 2022 flooding that devastated communities across the region.
“This budget reflects what Kentucky needs right now,” said House Appropriations Chair [Name], a Republican from Bowling Green who helped negotiate the final package. “It invests in infrastructure, it takes care of state workers, and it does so without raising taxes.”
Key Provisions
Infrastructure: The $2.1 billion roads and bridges allocation includes $680 million specifically earmarked for Appalachian Kentucky, where flood damage destroyed or degraded dozens of routes. Broadband expansion receives $340 million, targeted at unserved rural counties.
State employee pay: The budget includes a 6 percent pay raise in the first year for state employees, the second consecutive biennial budget to include salary increases after years of flat wages that caused significant workforce attrition in state agencies.
Education: The SEEK school funding formula receives an $85 million increase over the biennium, and community and technical colleges receive $120 million for workforce training programs tied to semiconductor and automotive manufacturing expansion.
“Eastern Kentucky has waited too long for this level of investment. The flooding showed us exactly where our vulnerabilities were. Now we’re actually addressing them.” — State Senator [Name], representing a flood-affected Eastern KY district
Rainy Day Fund
The budget maintains Kentucky’s Budget Reserve Trust Fund — the state’s rainy day account — at $2.7 billion, the highest balance in history. Fiscal conservatives in the majority argued that maintaining reserves was essential given economic uncertainty; some Democrats argued a portion should be used to address long-deferred social service funding.
What Didn’t Make It
Several proposals from the governor’s original budget request were reduced or removed in negotiations. A proposed teacher pension supplement was scaled back significantly. Funding for a statewide mental health crisis response infrastructure was approved in a reduced form.
What’s Next
The legislature adjourned its regular session Friday afternoon. The governor has no line-item veto authority under Kentucky’s constitution once a budget is signed. Implementation begins July 1.