Some of the most high-profile bills of the 2026 legislative session advanced through a chamber of the Kentucky General Assembly this week — and none are larger than the $31 billion two-year state budget bill.
House Bill 500 received a late amendment before clearing the budget committee Wednesday, and then advanced through the House chamber roughly 24 hours later, receiving the vote of every member of the dominant Republican supermajority.
Most Democrats voted against the budget bill, saying it shorted funds on education and Medicaid and left too much unspent in the budget reserve trust fund. HB 500 still has a long way to go, as it must pass the Senate, and then is likely to go to a conference committee, where legislative leaders will hammer out differences for a final version of the bill to clear both chambers by the end of March.
The House also passed a GOP priority bill Friday morning that makes wide-ranging changes to Medicaid benefits, largely spurred by new congressional mandates.
Two other bills received final passage this week and were sent to Democratic Gov. Andy Beshear’s desk for either his signature or veto. The Senate gave final passage to House Bill 1, which lets Kentucky opt into a new federal tax credit for donations to organizations that grant educational scholarships, as well as House Bill 314, which makes changes to the state agency administering the Kentucky Wired broadband network.
Below Kentucky Public Radio reporters Sylvia Goodman and Joe Sonka discuss the week’s developments in Frankfort.
This conversation has been edited for length and clarity.
Sylvia Goodman: Really the biggest piece of legislation that we're going to see the entire session is this two-year budget bill. Lay that out for us: what has it taken to get us to this point where it's now passed out of the House?
Joe Sonka: It still has a long way to go. House Bill 500 has changed a lot since it was originally filed in January. It was kind of a bare budget bill that didn't have a lot of spending details in it, but that changed on Wednesday, when there was a late amendment to the bill to add more spending.
But it still has a lot of cuts in some areas where Democrats wish there was more spending. It removed language that capped state employee health insurance costs for the state, but would have made premiums skyrocket for public employees and teachers. So that was settled, but it did leave a lot of money short on Medicaid — at least $220 million short of what the cabinet says is needed to pay out Medicaid benefits over the next two years. Republicans say that they don't actually believe the estimate that the Beshear administration is giving.
There's also education. The newest version of the bill did increase the per-pupil funding formula for public K-12 schools, but it is less than what Gov. Beshear is proposing. The overall bill still leaves $612 million unspent. If revenue and spending projections are correct, those funds would go into the budget reserve trust fund — otherwise known as the rainy day fund — that is already very, very large. There is $3.7 billion in that fund.
We're still a long way to go from the budget receiving final passage. It still has to go to the Senate, and then the House and the Senate will hammer out their differences in a bill, probably in late March.
There was another very-high priority GOP bill that was sent to the governor and has passed both chambers. Sylvia, tell me about House Bill 1?
Goodman: Republicans have tried a lot of different, so-called "school choice" measures in the last several years. But they've been entirely shut down by the state constitution and the courts. Now this is essentially a federal workaround that was created by the "One Big Beautiful Bill" passed last year.
States can opt into this federal tax credit that allows up to $1,700 per individual. It's a dollar-for-dollar tax credit to go to scholarship granting organizations, and it allows public and private schools alike to benefit from that money. It can be used for a lot of different things, including private school tuition, but also things like uniforms and books and technology for education purposes.
Under House Bill 1, the secretary of state would implement the program to get around Beshear's very strong opposition. The governor says that Kentuckians want their tax dollars --- whether that's state or federal money --- to only go to public education. But Republicans say that they want to help all Kentuckians succeed and that this money could also benefit public schools.
Joe, tell us about another bill that gained final passage this week that is also heading to Beshear.
Sonka: House Bill 314, this is a bill that affects the Kentucky Communications Network Authority, and that is the agency that administers Kentucky Wired — the massive statewide broadband internet project. This bill would eliminate the director position at the agency and move the whole agency out of the governor's office and under the Commonwealth Office of Technology. This is a move that Republicans say is needed because of a long, long list of problems related to cost overruns and oversight of Kentucky Wired over the past decade.
Goodman: And we also had another high profile piece of legislation that has only passed out of the House, that still has to head to the Senate. It's House Bill 2, that has to do with Medicaid, right?
Sonka: That was another big Republican priority bill that cleared the House on Friday morning. This is a wide-ranging Medicaid oversight bill, much of which is implementing changes mandated by the One Big Beautiful Bill we referenced earlier.
A large part of this bill is implementing the new work reporting requirements needed for low-income people to remain eligible for Medicaid coverage. It also goes further than that federal law in some areas, adding new co-pays that people under Medicaid would have to pay for certain services. And it also makes it harder for poorer counties in Kentucky to get a waiver from some of those work reporting requirements because of having a high unemployment rate there.
Goodman: So it's a lot that we're watching. We've got a couple more months to go at this point.
