FRANKFORT, Ky. (LEX 18) — Kentucky's General Assembly kicked off the 2026 legislative session on Tuesday with lawmakers facing their biggest task of the year: creating a new two-year state budget.
However, Senate Democrats and Republicans disagree on the state of Kentucky's finances as they begin this process.
Senate Democrats voiced concern over Kentucky's financial situation, saying forecasting groups predict a $156 million budget shortfall. They argue that cuts enacted by President Donald Trump's policies mean the federal government is pushing costs to Kentucky, while the state brings in less income tax revenue after cutting that tax rate nearly in half over recent years.
"Cuts in SNAP, cuts in housing, cuts in healthcare across the board. That's a shift to the local economy," said Minority Floor Leader Gerald Neal. "That means in states and local communities, decisions have to be made to replace that money, eliminate that service - and some of them vital services - or make some combination of the two. That burden has been shifted. That is a reality. We have to deal with that or do we just coast with that? Serious decisions will have to be made."
"There are serious, serious fiscal issues that we need to be addressing now with full intent, with full knowledge, and with absolute full transparency as to the dollars this state is going to be impacted by," Sen. Karen Berg said.
However, Senate President Robert Stivers sees things differently. He disagrees that this budget process will be one of tough decisions, saying Republicans feel comfortable dealing with the budget as it currently exists.
"Some people want to create choas, anarchy, some type of catastrophe," said Stivers. "But we feel like we're pretty comfortable dealing with the budget as it currently exists and in the next few years, we expect to have pretty robust growth in our receipts - even though we're cutting taxes."
"There is no dark cloud looming on the receipts or the budget, as some people want to portray. We feel very comfortable where we are. We've been able to manage and move the state forward," Stivers added.
Despite their different outlooks on the budget, Senate Democrats and Republicans agree on some priorities. Both parties say housing and childcare are issues that must be addressed as soon as possible.
