General Fund receipts for fiscal year 2026 exceeded budgeted estimates with a 1.7% increase
FRANKFORT, Ky. (July 10, 2026) – Following a report from the Office of the State Budget Director that General Fund receipts for fiscal year 2026 saw a 1.7% increase, marking the seventh consecutive budget surplus for the commonwealth, Gov. Andy Beshear recognized the opportunities this provides the state. The report is unexpected, good news after the official budget estimate called for a $156 million revenue shortfall in December 2025.
“Budget experts anticipated a shortfall, but thanks to strong fiscal management by my administration, revenues came in $320 million more, securing our seventh straight surplus,” said Gov. Beshear. “This is great news for our economy, and it also presents our General Assembly with an opportunity, now that we have more financial resources, to address some of the budget cuts. Our goal is to help Kentucky families, and we can do that by taking this good news and turning it into something great.”
7th Consecutive Budget Surplus
Released today, the announcement from the State Budget Director reported that General Fund receipts for fiscal year 2026 (FY26) totaled $15.98 billion, a 1.7% increase over the prior fiscal year. The official revenue estimate determined in December 2025 called for a $156 million revenue shortfall. Instead, revenues came in $320.6 million more than originally budgeted and exceeded the December 2025 official revenue estimate by $476.6 million, indicating better than expected performance of Kentucky’s economy.
Highlights from the report include:
- General Fund receipts total almost $16 billion;
- Road Fund collections total $1.82 billion;
- Individual income tax receipts rose 4.6%, $247.3 million more than the year prior; and
- Sales and use tax receipts were 6.4% higher than FY25 levels on growth of $375.3 million.
“General Fund growth of 6.2% in June capped off a very strong fourth quarter when receipts climbed 7.2%,” said State Budget Director John Hicks. “The growth rates for the sales and income taxes, our largest revenue sources, and better than expected business tax collections, reflect strength in the earnings of both Kentuckians and Kentucky businesses.”
Opportunity for General Assembly to Restore Critical Programs
Since the General Assembly passed the state budget in April, the state has suffered from major budget cuts to Medicaid, behavioral health services and senior meals. While the Governor put forward a budget in January that funded the Department for Community Based Services; maintained both the full funding and full services for health providers; fully funded Medicaid; expanded the number of Michelle P. Waiver slots for families of children with autism; and provided the dollars needed for senior meals, the Republican supermajority created and passed their own.
In the months since, the Governor and his administration have taken steps to address the cuts as they are able, but the lack of budgeted funding has caused these to be “Band-Aid” fixes that will require further action from the General Assembly. With the good news today, more funding flexibility is given to the legislature to address their cuts and the Beshear administration is working to identify recommendations to help push solutions forward.
“We have a real chance here to correct the mistakes made by the General Assembly and deliver on the services our Kentucky families need and deserve,” said the Governor. “My administration and I are committed to working with the legislature to get this done.”
The Governor has encouraged Kentuckians to reach out to their legislators and request they provide the funding needed to save these services. For Kentuckians who wish to contact their legislators, click here.
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