60-Day Session of Kentucky General Assembly Kicks Off This Week

State legislators will convene this week in Frankfort for the 60-day Regular Session of the Kentucky General Assembly, with the primary task of enacting the Commonwealth's biennial budget for fiscal years 2026-2028. Beyond the budget, Republican supermajorities are expected to advance several key priorities, including measures to address Kentucky's housing shortage, ongoing efforts to further reduce the state individual income tax rate, enhanced Medicaid oversight amid potential federal funding changes, and targeted one-time investments in communities statewide. In addition to allocating funds for various state cabinets and services, education funding - which historically accounts for more than half of the biennial budget - will remain a central focus, ensuring thorough legislative review during the Session.

view Commerce Lexington's 2026 Policy Statements

During the long Budget Session, some of the issues Commerce Lexington and regional leaders will be advocating for a variety of policy items to support the Regional Competitiveness Strategy, including: ​

• Pro-Growth Tax Reform: Supports continued phased reductions to Kentucky's individual income tax, which was lowered to 3.5% in 2025, and simplification of the tax code to enhance competitiveness.
• Housing Accessibility and Affordability: Lexington needs more than 20,000 units to meet current housing needs and to support the region’s workforce. Commerce Lexington will be advocating for a $20 million statewide bank capital fund and tax credits to address Lexington's housing shortfall and support workforce housing through streamlined regulations and local infrastructure financing options for developers.
• Talent Attraction and Retention: Backs a proposed three-year, $5 million statewide marketing campaign to position Kentucky as a premier place to live and work, targeting both in-state retention and out-of-state talent.
• Economic Development: Strongly supports sustained investment in the Kentucky Product Development Initiative (KPDI), which has already resulted in 16+ grants, 764 jobs, and $154 million in capital investment across the Greater LEX region.
• Critical Infrastructure: Supports sustained state investment in essential transportation (roads, bridges, airports, railroads) and utilities (water, sewer, energy, broadband) to improve economic connectivity, reliability, and affordability.
• Investment in Transformational Projects: Advocates for public-private investment in high-impact regional projects for the upcoming 2026 biennial budget, including the Bluegrass Airport Terminal Expansion, a new Lexington Children’s Museum, a new performing arts center, and investments in regional business parks to increase shovel ready land for jobs and infrastructure to expediate housing construction in Lexington’s Expansion Area 3 (Athens Boonesboro Road corridor).
• Childcare Accessibility: Supports prioritized investments in affordable, high-quality childcare to boost parental workforce participation (potential gain of 16,000–28,000 working parents) and generate significant economic impact, advocating for efforts to streamline regulations and sustain programs like the Employee Child Care Assistance Partnership.

The 2026 Session is scheduled to conclude by April 15. Commerce Lexington urges members to stay connected on state, local and federal policy issues during the year. Regular email updates will be provided to members throughout the year to keep business updated on what’s happening in City Hall, Frankfort, and Washington, D.C. and the impact on the Greater LEX region.