Anticipated state budget shortfall grows to $450 million

The Consensus Forecasting Group today in Frankfort offered an even gloomier picture of the state’s revenues and predicted a shortfall of $450 million at the end of the fiscal year in June. 

The updated prediction follows one by Gov. Steve Beshear‘s administration just last month that saw state expenses outpacing revenues by $294 million by the end of the year with revenue streams flowing more slowly than anticipated. 

The predicted $456.1 million shortfall amounts to a 5.1 percent decline in revenues from what was budgeted for the fiscal year that ends June 30. The state’s road fund is also expected to come up short, with the state expecting to bring in $105 million less than expected. 

The Consensus Forecasting Group is made up of independent economists charged with making predictions about state revenues. The group meets regularly to update state leaders and the public.

“This financial crisis is neither imagined nor exaggerated. It’s real and it must be addressed,” Beshear said in a press release. “Kentucky’s elected leaders, regardless of party or politics, must come together to confront this challenge. Make no mistake, only tough choices lie ahead.”

Beshear said last month when announcing the anticipated shortfall that he would be developing a plan of cuts and possible revenue measures to help balance the budget. 

There is talk that the legislature might meet in special session next year – along with its regular session – to address revenue proposals that could include an increase in the cigarette tax.

Learn more from the Herald-Leader or Courier-Journal.

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