KY Senate budget: More for retirees, juvenile centers — still short on detail
The Kentucky Senate on Wednesday unveiled its version of the next biennial state budget and one-time expenditure bill with relatively few changes from the House’s version of the two proposals.
The two major spending bills — House Bill 500, the mandatory two-year budget bill and House Bill 900, the one-time spending bill — were not unveiled to legislators until Wednesday’s meeting of the Senate Appropriations & Revenue Committee. They were not made public until well after the meeting concluded.
Major changes proposed for the executive branch budget include more funding for state government retirees via a “13th check” payment and pension funds as opposed to moving more funding into the Budget Reserve Trust Fund, like the House proposed. The latest version of the budget also would allocate $45 million for a female juvenile justice center to help a long-ailing department.
Overall general fund spending in the Senate version of the next biennial budget increases slightly — up from $30.98 billion over two years to $31.09 billion.
The new version of House Bill 900, meanwhile, made almost no changes, except raising the total spend from $801 million to $810 million. The bill still does not specify where the funds would go, aside from broad categories of projects.
“House Bill 900, much as the same with the House, is an ongoing work in progress. We have members from across the Commonwealth, across the partisan divide, and across many other spectrums, who have submitted requests for one time funding. Those will continue to be addressed as this process moves along,” Senate Appropriations & Revenue Chairman Chris McDaniel, R-Ryland Heights, said.
When asked when the public can expect to see more details on what projects will receive funding, McDaniel told reporters Wednesday morning “there may be something next week.”
“(But) I can’t guarantee that,” McDaniel said. “Members are still making asks. We’re still trying to sift through the asks that the members are making, and we’re just working through that process.”
Both bills passed out of the Senate Appropriations and Revenue Committee by a unanimous vote. Later in the afternoon, the bills unanimously passed the Senate floor with little discussion.
13th check for retired employees
The money for the so-called “13th check” to retirees comes from a mechanism introduced in the House version of the budget meant to squirrel away more funds to the Budget Reserve Trust Fund, whose balance is one of the “triggers” Republicans have set for themselves to be able to cut the state income tax rate again.
The source of the funds is a transfer from the Insurance Regulatory Trust Fund, which is a self-funded regulatory pool meant to support Department of Insurance operations and regulatory oversight, of $350 million
McDaniel said in the meeting Wednesday that the 13th check would cost roughly $81 million. The remaining balance of about $269 million would go toward the Kentucky Employee Retirement System’s Non-Hazardous Insurance Fund, which pays for retiree health insurance benefits.
Funding for new juvenile justice centers
Efforts by Sen. Danny Carroll’s, R-Paducah, to improve mental health care for Kentucky youths in state custody is reflected in the Senate’s budget.
It sets aside $45 million for one girls-only detention center and $35 million for a high acuity juvenile mental health facility, both of which are proposed in Carroll’s Senate Bill 125.
In SB 125, the legislation would build two girls-only detention centers for the Department of Juvenile Justice, with one in Western Kentucky and one in Central Kentucky, as well as a mental health juvenile detention facility. But the bill, which passed the Senate and waits for action in the House, lacked funding for any of those projects.
The House didn’t include any money for Carroll’s projects in their budget, while Democratic Gov. Andy Beshear’s budget includes $90 million to build the two girls’ detention facilities and $35 million for the mental health juvenile detention facility.
This also isn’t the first time Carroll has pitched this idea. He introduced similar measures during the 2024 and 2025 legislative sessions that advanced in the Senate but died in the House. Carroll believes the three new centers would help address a plethora of issues the Department of Juvenile Justice has faced in their facilities.
The department has struggled to keep youths segregated by gender and severity of their alleged offenses because of infrastructure that needs millions of dollars in improvement. In 2022, a girl held at the Adair County facility was raped during a riot there, and the facility has experienced other scandals and systemic failures, including chronic understaffing, youth riots and drug use.
Higher education funding restored
While the House’s budget cut millions of dollars across the state for higher education, the Senate decided to restore that funding.
The Senate included postsecondary education institutions among other state agencies that would not experience funding cuts and added around $20 million money over the next two years into the performance funding formula across the next two fiscal years.
While other entities will experience funding cuts in the Senate’s budget, McDaniel said postsecondary education institutions are among a list of state agencies exempted from those reductions. He also noted that the Senate’s budget adds $20 million more into the performance funding formula across the next two fiscal years.
“We’re more along the existing base universities have (compared to the House budget),” McDaniel said. “We believe strongly the performance funding formula is driving results in the Commonwealth, and it’s been a very, very good approach.”
The performance-based funding model allocates money to schools based on a set of metrics, which can include graduation and retention rates, number of credentials and degrees awarded, and degrees in high-demand fields.
Prior to the Senate committee meeting, education leaders across the state raised alarm bells over the funding cuts to higher education.
Aaron Thompson, president of the Council on Postsecondary Education, previously said in total, Kentucky’s public colleges and universities would see cuts of $42 million in 2026-27 and $73.5 million in 2027-28 in the House’s budget. The University of Kentucky, Kentucky’s largest university, would see cuts of 4% in 2026-27 and 3% in 2027-28.
While UK’s budget is funded from a variety of sources, including UK HealthCare revenue and tuition, UK President Eli Capilouto previously said at a House committee meeting that state dollars are “the critical first dollars into our budget,” Capilouto said.
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This story was originally published March 18, 2026 at 12:35 PM.
