Recent state revenue receipts show that Kentucky’s real income is falling short of projections and will lead to a multi-million dollar budget shortfall.
State Budget Director Jane Driskell says the state will have to raise revenues by about 12 percent to make up for a nearly $28 million hole that could grow larger if revenues continue to underperform.
But Gov. Steve Beshear, who championed a restoration of education funding during this year’s General Assembly, says if spending cuts need to be juggled to make up for the shortfall, education spending should not be disrupted.
“I can assure you this: The investments that we are making in the next two years in things like education of our kids are not going to be touched," said Beshear. "We’re not going to interfere with what great steps we have taken to move education forward in Kentucky.”
Beshear says his administration is unsure just how big the shortfall will be, but promised that the budget will ultimately be balanced.
A budget proposal to be unveiled by the Kentucky House of Representatives will closely resemble the $20 billion biennial budget outlined by Gov. Steve Beshear.
House Appropriations and Revenue chair Rick Rand says that that chamber’s budget will be virtually the same as the governor’s, specifically in the area of education. It largely preserves Beshear’s requests for the funding formula known as SEEK and implements raises for teachers.
He says that the biggest differences between the House’s proposal and the governor’s plan include rejecting new fees for county property valuation administrators, as well factoring in pay hikes for Legislative Research Commission staff despite cuts to that agency.
“The challenges we had to face were twofold. One was the PVA issue, which obviously we didn’t accept. And then we really felt that, you know, with the governor just took the LRC budget and cut it five percent. it didn’t allow for state employees pay raises, or LRC employee pay raises, or increased cost of retirement, so we added those in.”
Rand says the committee will likely pass a budget bill Tuesday, and he expects the full House to approve the measure on Wednesday.
After that, it will head to the Republican-led Senate.
Commissioner Jonathan Gassett has spent more than $71,000 to attend meetings across the country during a time of financial belt-tightening across state government. That's far more than even the governor's chief industrial recruiter whose job requires extensive travel.
Tennessee general fund revenues have beaten projections by more than a half-billion dollars with one month left in the budget year. State Finance Commissioner Mark Emkes says collections came in at $130 million above estimates in June, which reflects economic activity from the previous month.
Negotiators for the Senate and House have started talks to work out disagreements on spending priorities for a new state budget in Kentucky. A group of Representatives and Senators held their initial meeting this morning on the two year, 19.5 billion dollar budget.