| Priorities Compete for State Dollars |
Laura Cullen Glasscock The Kentucky Gazette
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Priorities Compete for State Dollars
By Laura Cullen Glasscock
The Kentucky Gazette
reprinted with permission
It’s the usual subjects: taxes, education and health care. Health care costs and accessibility are such hot issues, even the Kentucky Farm Bureau plans to call on state lawmakers to address them in the 2008 session of the Kentucky General Assembly.
Along with the Farm Bureau, the session will see thousands of others calling for changes and requesting funding during tight economic times.
Going into the biennial budget, the state is looking at a structural imbalance of about $750 million, which is due to three primary instances of spending one-time money. For one, the state carried forward $579.3 million of one-time money into FY08. Secondly, $84.6 million is to be transferred from agency or restricted funds into the General Fund. And third, the law on the escheatment of abandoned property was changed from seven to five years, meaning the state was able to book about $17.8 million in FY08.
To structurally balance the budget, the governor and lawmakers will have to make up the $750 million for the General Fund to get to an even starting point going into FY09, which begins July 1, 2008.
This is complicated by the request of about $166 million in current year appropriations that have been categorized as supplemental budget requests for FY08. These requests include roughly $112 million for Medicaid; $33.7 million for the Department of Corrections; $4.2 million for Juvenile Justice; $4.1 million for Kentucky State Police; and $8.8 million for the Commerce Cabinet. Much of Commerce’s request is due to slowing revenue at some state parks and resorts, as rooms were vacant during planned remodeling and renovations.
No action has been taken yet on the $166 million requests.
The general fund is expected to grow by 2.4 percent in FY09 and by 3.6 percent in 2010. This will provide $211 million in additional money in FY09 and then $534 million for FY10 over what we have this year. This still isn’t enough to cover the current structural imbalance.
The Consensus Forecasting Group, which analyzes economic trends, is expected to revise these numbers some time between now and some time in January. Governor Steve Beshear will use these numbers when he crafts his first budget to present to the General Assembly by January 29.
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