State budget picture 'getting worse, not better'

State News

Discussion

August 27, 2009

By RONNIE ELLIS The Glasgow Daily Times Thu Aug 27, 2009, 03:35 PM CDT

FRANKFORT — The General Assembly just enacted a budget reduction plan which cut the state budget by $1 billion but Budget Director Mary Lassiter told lawmakers Thursday that won’t likely be enough.

She said the state finished fiscal year 2009 on June 30 with 2.7 percent less revenue than it received in 2008. Now, the Consensus Forecasting Group, independent economists who advise the state on the economy and projected revenues, predicts the state will see revenues drop this year another 2.5 percent.

“Things are getting worse, not better,” Lassiter, who also is Gov. Steve Beshear’s Executive Cabinet Secretary, told the Interim Joint Committee on Appropriations and Revenue. “Things have been deteriorating very quickly.”

Lassiter said when lawmakers passed the budget reduction measure in a June special session, they removed some of Beshear’s proposals for savings such as three to five unpaid holidays for state workers while adding tax breaks and credits for car and home buyers. That has forced the administration to cut most agencies by 4 percent over last year’s spending, rather than the 2.6 percent Beshear had proposed.

Exempted, however, are such programs as SEEK – the school funding formula – Medicaid, mental health services and public safety.

Lassiter said while it appears the recession may be ending, many national economists are predicting a “jobless recovery” in which employers are slow to rehire laid off workers and unemployment is expected to remain high through the end of 2010 – it’s currently almost 11 percent.

The state has softened the blow by using federal stimulus money – from the American Recovery and Reinvestment Act or ARRA. Most of that has come in Medicaid which is funded by a federal-state match. Instead of the previous 70 percent match, the federal government is paying 80 percent of the cost and the state transferred the savings from the general fund to other programs.

That frightens Rep. Jimmie Lee, D-Elizabethtown. He worries when the stimulus ends in December 2010, the state will have a difficult time finding the money to cover the gap.

“I have a grave fear there is a cliff out there for Medicaid,” Les said.

“There is a cliff in Medicaid and there is a cliff in the general fund,” Lassiter responded.

Rep. Harry Moberly, D-Richmond, said the current budget would be nearly $300 million in deficit if not for the stimulus funding – even after the $1 billion adjustment. Rep. Jim Wayne, D-Louisville, asked if the administration has discussed revisions in the tax code, something Wayne has long pushed to do. Lassiter said there has been no specific discussion of tax reform.

“But you have a gap and you either have to cut spending or raise revenue or some combination of both,” Lassiter said.. “It’s not rocket science.”

If the Consensus Forecasting Group projections are accurate, Lassiter said, it will be fiscal year 2012 before the economy will supply enough growth to return state revenues to the fiscal year 2008 levels.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort.. Reach him at rellis@cnhi.com.

Text Only

State News

It’s back to the drawing board for legislators
Confusion reigns in the wake of a judge’s ruling that state redistricting maps passed by the General Assembly are unconstitutional. That ruling said until the legislature offers a plan that meets constitutional muster, 2012 candidates for the legislature must run in the districts drawn 10 years ago.

February 9, 2012
Pending redistricting ruling overshadows legislative business
It has been hurry up and wait this week in Frankfort. With everyone waiting to learn if a Franklin Circuit Judge will throw out the legislature’s plan to re-draw legislative districts and a hold on the filing deadline for fall elections, lawmakers are watching the calendar and court docket more closely than that day’s orders.

February 4, 2012
ELLIS UPDATE: Lawmakers closer on new district mapping
Democratic House Speaker Greg Stumbo said Thursday that lawmakers in the Republican Senate and Democratic House are close to an agreement on re-drawing the congressional district map.

February 3, 2012
UK, UL leaders: Cuts are hurting higher ed
The presidents of the University of Kentucky and the University of Louisville told a legislative panel that they will keep working to achieve the goals of higher education reform passed in 1997 in spite of on-going budget cuts. But they made it clear it won’t be easy.

February 3, 2012
Lawmakers closer on new district mapping
Democratic House Speaker Greg Stumbo said Thursday that lawmakers in the Republican Senate and Democratic House are close to an agreement on re-drawing the congressional district map.

February 3, 2012
Stumbo files anti-pill mill bill
Under provisions of a bill filed Thursday in the General Assembly, pain clinics would have to be owned by licensed health care practitioners and any health care professional who prescribes controlled substances would have to register with and utilize the state’s electronic tracking system.

February 3, 2012
Jill York files to run against Rocky Adkins
The new legislative district maps prompted some tough decisions by some key lawmakers – even before the new map and Tuesday’s filing deadline were cast into doubt by a Franklin Circuit Court restraining order.

February 1, 2012
Filing deadline extended for congressional races
While attorneys argued before a judge about the constitutionality of the state legislative redistricting plan, the General Assembly has extended the filing deadline for congressional races — because lawmakers can’t agree on a map for congressional districts.

January 31, 2012
GOP files suit over new state districts
Three Republican lawmakers and two private citizens filed suit Thursday in Franklin Circuit Court to have the House legislative redistricting plan declared unconstitutional.

January 27, 2012
Committee reviews pill mill bill
Just one day after state and federal law enforcement officials raided a Paintsville pain clinic for the second time in a year, a Senate committee Thursday began reviewing a bill to regulate such clinics.

January 27, 2012
More State News Headlines

State News

Search Results

Discussion

State budget picture 'getting worse, not better'

Site Map