Governor Steve Beshear will leave office with tax revenue expected to grow in the coming years and the state is predicted to have a budget surplus at the end of this fiscal year, but ooming expenses will likely cloud those sunny projections.
A report from outgoing State Budget Director Jane Driskell shows that the state will have to find another $500 million to help pay down additional expenses over the next two fiscal years.
Among those expenses are $1 billion in contributions to the teacher pension system over the next biennium. Also, the state is facing $575 million in additional Medicaid expenses, which includes $212 million to cover the cost of the Medicaid expansion under the Affordable Care Act.
The budget will play a dominant role in the General Assembly session starting in January. Incoming Governor Matt Bevin has already suggested spending cuts, though he has offered few specifics on what programs or departments could lose funding.
Bevin has named Louisville accountant John Chilton as the state's next budget director.
