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Kentucky Association of Counties


County Champion


Budget analysis: What the General Assembly approved for counties

By Kayla Carter Smith, Policy Analyst
Four spending bills sent to Governor’s desk for consideration

Only two working days remain in the General Assembly’s 60-day regular session. In a rush of legislative activity last week, lawmakers worked to send as many priority bills as possible to the Governor prior to the veto recess.  

The Governor may sign, veto, or let the bills become law without his signature. With appropriations bills, the Governor can line-item specific provisions in the bills rather than veto the entire bill.

Lawmakers could override any vetoes when the House and Senate convene April 12 and 15.

The legislature passed HB 6 (executive branch budget), HB 1 (one-time funding bill), HB 265 (Transportation Cabinet budget), and HB 264 (judicial branch budget). These bills will fund operations through the FY2025-FY2026 biennium.

Counties rely on funding in the state budget to carry out functions of the state at the local level. An analysis of how each bill will impact counties is below.

Executive Branch Budget (HB 6)

The $131.7 billion proposed executive branch budget continues funding for many critical items provided in the previous state budget (FY2023-FY2024), including:

  • Maintains the $35.34 per diem rate for housing state inmates in county jails
  • Maintains the court security reimbursement rate at $15/hour. To be eligible for this enhanced rate, deputies providing services must be paid at least $10/hour.
  • Continues to fund the Outlier Audit Assistance Program for one fiscal year at $250,000 in FY2025 and provides $2.25 million each year to keep county clerk and sheriff audit costs at 50 percent.
  • Provides $12 million each year to continue funding for inmates to complete jail programs that result in a credit against their sentence. This funding program was set to expire after FY2024.

The bill also includes new funding relevant to county officials:

  • $5 million each year to complete the statewide deployment of Next Generation 911.
  • $5 million in FY2025 and $10 million in FY2026 for grants to law enforcement and first responders through the Attorney General’s office for the purchase of body armor, duty weapons, ammunition, electronic-control devices and body-worn cameras.
  • $19,988,100 in FY2025 for the Rural Infrastructure Improvement Fund. This fund was created during the 2022 legislative session to assist internet providers with utility pole replacement costs. $8 million of the appropriation is directed specifically toward:
    • $4 million to pole owners for the hiring of temporary workers to help manage the increased volume of pole attachment permit requests;
    • $2 million to Kentucky Association of Electric Cooperatives for pole replacement activities;
    • $2 million to the Office of Broadband Development to support hiring temporary workers for investor-owned utilities and other pole owners.
  • $16.5 million in FY2025 and $18 million in FY2026 to help fund salaries for school resource officers. Local school districts will be reimbursed up to $20,000 for each campus employing at least one on-site full-time certified school resource officer.
  • Additional fund for County Attorneys and Commonwealth’s Attorneys for case management software and salary compensation standardization.

While HB 6 does not provide new funding for county jails, it does include a pre-trial housing study in FY2025 to examine the projected savings to county jails and the potential cost to the Department of Corrections to transfer pre-trial inmates charged with a capital crime, Class A felony, or Class B felony sex offense to a state prison 60 days after arraignment.

  • Required to include the average number of days of pre-adjudication incarceration by each offense from arraignment until conviction, and until post-conviction sentencing. The analysis will be broken down statewide by regional Circuit Courts and by each specific Circuit Court.
  • Required to be submitted to the Interim Joint Committee on Appropriations and Revenue on or before Oct. 1, 2025.

One-time Funding Bill (HB 1)

HB 1 provides $2.7 billion in one-time investments to be funded out of the Budget Reserve Trust Fund (also referred to as the Rainy Day Fund). These appropriations will be excluded from the income tax reduction trigger formula and will not impact efforts by the legislature to reduce the state income tax. The bill provides funding to many specific county projects and includes funding to programs important to counties, including:

  • $200 million in FY2024 for the Government Resources Accelerating Needed Transformation (GRANT) Program, also referred to as the HB 9 program that passed during the 2023 legislative session. This program was established to provide matching funds to local governments to leverage the unprecedented amount of federal grant funding available for energy communities.
  • $35 million each year to the Kentucky Product Development Initiative (KPDI) program.
  • $75 million each year to the Kentucky Water or Wastewater Assistance for Troubled or Economically Restrained Systems (WWATERS) Fund. This program was established through HB 563 this session and has been delivered to the Governor.
  • $10.6 million in FY2025 to provide $200,000 grants to each of the general aviation airports, provided they have an automated dependent surveillance broadcast system installed at the airport. If an airport does not have an automated dependent surveillance broadcast system, the grant funds can be used to purchase a system.
  • $250 million in FY2025 and $200 million in FY2026 to the Kentucky Transportation Cabinet to support the State Supported Construction Program for select projects identified for industrial development, economic and quality improvement, or located in high-growth counties.

The bill also appropriates $56.4 million in FY2025 from the Kentucky Law Enforcement Foundation Program Fund for two expenditures:

  • $50 million to construct the Western Kentucky Law Enforcement Training Academy in Madisonville;
  • $6.4 million to the Kentucky State Police for the purchase of lab equipment.

Transportation Cabinet Budget (HB 265)

Counties rely on funding from the Transportation Cabinet budget for the maintenance of county roads and bridges. HB 265 provides $146.9 million in FY2025 and $157.3 million in FY2026 for county road aid based on the revenue sharing formula.

The bill also provides new funding opportunities for counties:

  • $20 million in each year for the County Priority Projects Program to assist with county and city roads. The Transportation Cabinet will be required to submit a list of qualified discretionary projects that were ranked as an 8, 9, or 10 by Nov. 1 of each year to the legislature. The projects approved by the General Assembly for FY2025 are in HJR 92.
  • $25 million in each year to establish the County and City Bridge Improvement Program.

Judicial Branch Budget (HB 264)

HB 264 provides funding for judicial branch operations. The budget includes a 3 percent salary increase each year for eligible employees, which includes deputy circuit court clerks.

The budget also provides funding to expand mental health court by ten more sites, including Bourbon Scott and Woodford counties, $1.6 million in FY2025 and $1.5 million in FY2026.

The bill includes a provision requiring courts to use the video arraignment system that was funded in the FY2022 budget cycle. If the court does not use the video arraignment system, when available, the Administrative Office of the Courts (AOC) would be responsible for the costs associated with transporting prisoners to and from arraignments.

The bill also requires AOC to study the potential ways an increase in juror pay could impact timely case disposition, including juror attendance rates and a comparison of Kentucky's juror pay to surrounding states.

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