FRANKFORT — As storm clouds continue to gather over an “unsettling and tumultuous” economic landscape, Kentucky’s General Fund revenues fell by 4.6 percent in September over the same time last year.

Gov. Steve Beshear said Thursday revenues for the year have grown under 1 percent and because of “such uncertain times we really don’t know where it’s going and thus we don’t know where our revenues are going.”

He said it’s too early to think about a special session to re-do the budget or to raise revenues through an increase in the cigarette tax – something he supports – because it’s almost impossible to predict what will happen in the next few months. But there are no plans for employee layoffs, and Beshear said the number of full-time state employees, about 32,570, is less than at any time in nearly 20 years.

“Our budget already assumes significant adjustments” said state budget director Mary Lassiter. “We are concerned and we’re taking an unusually hard look at the numbers.”

The current state budget, which became effective July 1 and runs through June 30, 2010, requires a two-year, 2.6 percent growth in revenues to balance. It already reduces state expenditures by $900 million over the previous budget.

And the road fund dropped even more than the General Fund, down 11.4 percent over last year and 4.5 percent through the first three months of the budget.

Cabinet Secretary Larry Hayes chided reporters for focusing on the budget, telling them state government is trying to be proactive and “manage the state’s economy” to ameliorate the glum financial conditions.

Beshear said Kentucky was able to sell $400 million in bonds earlier this week on Wall Street to fund construction, including university and water and sewer projects – something other states had been reluctant to attempt.

“These projects create good paying jobs which stimulate the economy,” Beshear said. He said the state will continue to recruit jobs and industry. In the meantime, Beshear said the state is trying “to make sure that anything we do helps folks get through this.”

The state will create a Web site where people can be linked to information and referrals about insurance, mortgages and other financial information and Beshear is appointing an “Economic Action Team,” with cabinet secretaries Janie Miller, Bob Vance, Helen Mountjoy, Jonathan Miller, Hayes and Lassiter, to advise him regularly on how the economy can be boosted and to manage the budget to continue state services.

Commissioner of Financial Institutions Charles Vice said Kentucky’s banks and lenders are in better shape than many across the country – with fewer sub-prime mortgages, less investment in mortgage giants Freddie Mac and Fannie Mae, and fewer foreclosures.

Beshear said the state is managing its cash flow, and conservative management practices since he took office have prepared the administration to deal with the economic crisis.

“The state is meeting all its obligations. We have no cash problems,” Beshear said. “We’re on a very sound financial basis.”

Beshear said the state’s unemployment fund is sound and hasn’t needed to appeal to the federal government for money.

“Anybody who qualifies for those benefits, they’re going to get them in Kentucky,” he said.

But despite the message that his administration is trying to be proactive, Beshear conceded, “We are in for some tough times. A lot of people are going to feel a lot of pain out here – a lot of people are feeling it right now.”

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. He can be reached by e-mail at rellis@cnhi.com.