County Line • Winter 2026 • Counties on the line

Jail costs, budget pressures and road funding dominate a critical 60-day session

State legislators are back in Frankfort for the 2026 legislative session, a fast-paced, 60-day session with major implications for Kentucky counties. The General Assembly will have until midnight on April 15 to pass legislation that will impact county budgets, services and infrastructure for years to come.

Chief among legislator responsibilities is the constitutional mandate to pass a biennial state budget, a road plan and a judicial branch budget — decisions that directly affect every county.

Combined with other fiscal needs, such as county jails, the 2026 session is shaping up to be one of the most consequential in recent years for county governments.

KACo has identified the issue of county jails as its top legislative priority for 2026, warning lawmakers that the current system is no longer sustainable.

Over the past six years, transfers from county general fund budgets to support jails have increased 76% — from $96.5 million in fiscal year 2019 to $170 million in FY2025, excluding Fayette and Jefferson counties. Combined, Fayette and Jefferson transferred more than $100 million to their jails in FY2025 alone.

These continually rising subsidies from county general fund budgets to jails has forced some communities to impose tax increases and/or cut funding to other services.

Rep. Michael Meredith has championed this issue by filing HB 557, which has garnered more than 40 cosponsors and the backing of the Kentucky County Judge/ Executive Association, the Kentucky Magistrates and Commissioners Association, and the Kentucky Jailers Association.

Following months of research and gathering input from across the state, the KACo Board of Directors voted to endorse a comprehensive approach — “Reshaping the Shared Responsibility for County Jails in Kentucky” — as its primary legislative priority for 2026. The proposal focuses on three key points:

KACo outlined this plan during the final 2025 meeting of the Interim Joint Committee on Local Government, with testimony led by President and Union County Judge/Executive Adam O’Nan and Immediate Past President and Harlan County Judge/Executive Dan Mosley.

Kentucky has 70 full-service jails, three life safety jails and 43 counties operate no jail and must contract with neighboring facilities. Only four regional jails currently exist, despite interest in several parts of the state.

“[Union County] saved $700,000 by closing our jail and taking inmates to Webster County,” Judge O’Nan said. “Regionalization may not work everywhere, but in areas where it is feasible, we believe some targeted small incentives and statutory adjustments would make this option far more attainable.”

• One-time state funding for construction or renovation of regional facilities

• Expanding regional jail authority board membership to include all participating counties’ jailers

• A one-time incentive payment for counties that close a jail and join a regional authority

Under current law, counties bear the full cost of housing individuals charged with felonies while they await trial — often for months or even years — despite the fact that this time is later credited toward state sentences.

Judge Mosley cited an example of a Harlan County inmate who has been incarcerated for three years awaiting trial on a murder charge. The inmate has cancer, and the county shoulders all costs associated with their housing, food and medical care.

If a person is found guilty of a felony offense, the county continues paying the full cost of housing for the inmate until sentencing, when the state begins paying counties a per diem for housing state inmates. Kentucky law credits the time an inmate spent in jail awaiting trial toward the inmate’s state sentence, effectively lowering the cost to the state but not to the county.

“In Harlan County, we’ve had individuals receive enough credit for time served that their entire sentence was satisfied the day of sentencing, meaning that the county paid the total cost of incarceration,” Mosley said.

KACo supports reviving legislation that would reimburse counties for the pretrial time credited to felony sentences.

“This approach is fair, recognizes the cost borne by counties and acknowledges the financial benefit that the state receives when pretrial time counts toward a felony sentence,” Mosley said.

KACo Director of Government Affairs Shellie Hampton closed the presentation with the last jail priority: Replace the current per diem model for state inmates.

Counties house an average of 7,120 state inmates, receiving a $35.34 per diem rate from the state. That amount is far below the $63.44 average daily cost per inmate to operate county jails (excluding Fayette and Jefferson counties) in FY2025.

“That funding gap has got to be addressed,” Hampton said. “At the same time, we recognize that this is a state-county partnership, and that accountability on both sides is essential to ensure that jails are supporting our shared goal of rehabilitation.”

KACo recommends requiring the Department of Corrections to contract with each fiscal court or regional jail authority, paying the actual cost of housing state inmates. In exchange, jails would agree to provide programming such as substance-use treatment, cognitive-behavioral programs, reentry services and workforce training. Hampton told legislators that while several county jails already offer some of these programs, many are unable to without funding.

HB 557 creates a fair and transparent approach to the county jail system. Counties would receive adequate funding to house state inmates on behalf of the Commonwealth, and the state would have confidence that inmates are receiving the tools as well as the services they need to successfully return to their communities.