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.

State revenue projections to be adjusted for “worst case scenario”

The Consensus Forecasting Group met today in Frankfort and is telling state officials to expect revenue projections to be adjusted downward next week. 

Beth Musgrave with the Herald-Leader is reporting that the group decided to use a more pessimistic outlook for state revenues in the coming months n based on economic indicators that point to a “worst case scenario.”

The group will meet again next Friday to finalize new revenue projections for the state’s general and road funds for the current fiscal year, which began July 1. 

Gov. Steve Beshear announced last month that the state was facing a $294 million revenue shortfall for the current fiscal year and talk has begun about budget cuts and revenue measures, including an increase in the cigarette tax.

Kentucky to get another look at revenues, economic future on Friday

A meeting of the Consensus Forecasting Group on Friday will give state leaders another look at the shape of Kentucky’s finances this fiscal year and predictions about how the rest of the year is shaping up. 

The seven-member group is composed of independent economists charged with making predictions about state revenues and meets regularly to update state leaders and the public. The group’s predictions are particularly important come budget time when they become the basis of the state’s two-year spending plan. 

Tomorrow’s meeting follows the announcement by Gov. Steve Beshear last month that the state was facing a shortfall of close to $300 million in general fund revenues for the current fiscal year ending June 30. 

At an Oct. 30 press conference, Beshear talked about his “three-point action plan” for the next several weeks that starts with asking the Consensus Forecasting Group to finalize revenue projections for the year.

After those projections are made, Beshear said he plans to forming a plan to address the shortfall that includes spending cuts and may include revenue measures and then bounce those ideas off of state residents, interest groups and legislators.