The Republican leaders of both Kentucky’s chambers of legislature took the stage in Paducah Thursday to discuss incentive opportunities and other actions state lawmakers are considering ahead of the 2026 budget session.
Two of the big topics Senate President Robert Stivers and House Speaker David Osborne discussed at the Paducah Area Chamber of Commerce’s Public Policy Luncheon were the potentials of nuclear energy developments and artificial intelligence projects in Kentucky, – both of which could have implications for the future economic development of far western Kentucky.
Last week, the Department of Energy tabbed the former Paducah Gaseous Diffusion Plant site as one of four federally-owned properties that could house future data center and energy generation projects. On Friday, a company with ties to billionaire investor and Trump ally Peter Thiel announced plans to build the country’s first American-owned, privately developed facility to enrich uranium in McCracken County.
Stivers said supporting nuclear energy and AI projects could go hand-in-hand. The Clay County Republican said if the United States is going to be competitive in the AI sector, the country needs to have more energy sources to power those projects.
“I think nuclear is the energy source of the future,” Stivers said. “I think what we're going to have to do is just exactly what we've done in these last budget sessions, is to continue putting money into research and research related to how we make it more efficient, how we make the grid more efficient and what we do with byproducts.”
Osborne said, with the speed that the AI and data processing fields are developing, the best way the state could help communities interested in attracting these kinds of projects is to arm them with knowledge.
“I think the best thing that we can do – for not just Paducah, but for any local government that is going to be facing these things – is to try to develop a set of tools that we can give to local governments to to prepare them for the both the successes that will come from it, as well as the the real problems that they create,” Osborne said.
The two Kentucky legislative leaders were also asked about how the federal spending and tax bill that Republicans dubbed the “One Big Beautiful Bill” would impact the Bluegrass State. Under the measure that was signed into law in early July, Kentucky is expected to lose billions of dollars in Medicaid spending.
While he said it was too early to tell what the full scope of impacts from the bill would be on Kentucky, Osborne called the federal measure “dramatically important” for the Commonwealth, where around one-third of the state’s residents are covered by Medicaid.
The reduction in Medicaid spending comes months after the GOP-dominated Kentucky state legislature passed a measure adding work requirements for able-bodied Medicaid recipients without dependents. A previous attempt for a mandatory community engagement waiver program in Kentucky was struck down by a federal judge in 2018.
The House Speaker said those work requirements could help Kentucky businesses who are looking to grow their employee base.
“I think that there's tremendous possibilities for the evolution of our workforce because of those work requirements,” Osborne said. “One of the main things that is causing or limiting growth in Kentucky is the availability of a qualified workforce, and so the ability to to help transition people from public assistance into the workforce is really promising.”
The two Republicans also gave a preview of how they expect the 2026 budget session to go. Osborne said, for the upcoming two-year budget, two of the state’s cabinets would construct their proposals under a zero-based budgeting system. Under that philosophy, Osborne said those cabinets’ budgets would be constructed from the ground up, with each spending line being analyzed.
The House Speaker expects a budget bill to be introduced in the first week of the 2026 session.
