Beshear says budget shortfall could top $1 billion
Gov. Steve Beshear
FRANKFORT — Kentucky is bracing for what may be the largest shortfall ever in its state budget — more than $1 billion.
Gov. Steve Beshear said Thursday that a special legislative session is likely to address the dismal financial scene that comes on top of this year’s law-making session that raised taxes on cigarettes and alcohol and made about $150 million in cuts to handle nearly a half-billion budget shortfall.
The Democratic governor did not offer any immediate remedies for the latest money problem, saying it’s too early to speculate might be done but that “everything will be on the table.”
Solutions could include raising more revenue through tax increases or expanding gambling, making more cuts or using part or all of $651 million the state is expected in a “state stabilization fund” from federal stimulus dollars.
Beshear did say additional cuts “won’t be easy.”
Senate President David Williams, R-Burkesville, said after a morning meeting Beshear held with legislative leaders behind closed doors in the Capitol that he thought a special session was unnecessary and that Beshear could “manage” any potential shortfall through cuts.
If there is a special session, Williams said, lawmakers could give the governor the necessary authority to make cuts.
Williams came under criticism this year from some Republicans for the tax increases. The Senate leader also has been a strong opponent against expanded gambling.
Beshear, at a news conference in the Capitol, said his staff expects a budget shortfall in the new fiscal year that begins July 1 to be in the range of $818 million to $1.094 billion. The state’s General Fund budget is about $9 billion.
Beshear said he will ask the Consensus Forecasting Group, a group of independent economists, for a more precise projection of revenue projections for 2010 by the end of May.
If the forecasting group estimates a shortfall of more than $1 billion, it would be the largest in the state’s history, the govenor said.
Kentucky is expected to finish this current fiscal year on June 30 about $10 million ahead of its official revenue estimate. But Beshear said that money will quickly be swallowed up by expenses related to last January’s devastating ice storm.
Once the forecasting group provides its estimate of the 2010 revenue picture, Beshear said, he will present proposed solutions to use as a foundation for more formal discusssion.
“It will represent a starting point, not an end point. We will have an open discussion in which everything will be on the table,” he said.
Options include using all or part of $651 million in federal stimulus money from a “state stabilization fund,” expanding gambling, raising taxes or making more budgetcuts to balance the state’s books. Beshear said it was too soon to say whether he would push the legislature to consider expanded gambling as a way to beef up the state’s ailing coffers. Beshear campaigned on expanding gambling in 2007.
Beshear also did not rule out an overhaul of the state’s tax code which has been pushed by some in the House of Representatives.
Rep. Bill Farmer, R-Lexington, has a tax overhaul proposal that could generate $1 billion in additional tax revenue according to a recent Legislative Research Commission analysis.
Farmer’s proposal includes adding taxes on service industries and moving the state from an income tax to sales tax.
Farmer said he met with House Speaker Greg Stumbo, D-Prestonsburg, Thursday afternoon about his proposal.
Stumbo has said that he believes Farmer’s bill and another tax overhaul proposal by Rep. Jim Wayne, D-Louisville, should have hearings.
Farmer said he realizes that eliminating the income tax and moving to a sales tax system will be a tough sell. However, with the additional dollars his plan will generate, he thinks more legislators will be interested in hearing his proposal.
“It is a tough sell,” Farmer said. “But I think a lot of people are interested in it, but it hasn’t had a fair hearing yet.”
–Jack Brammer and Beth Musgrave
Filed Under: Dan Kelly • David Williams • Featured • Greg Stumbo • KY General Assembly • Rocky Adkins • State Budget • State Government • Steve Beshear
About the Author: 
[...] This post was Twitted by BGPolitics – Real-url.org [...]
Turn more convicts loose, lay off state employees for a full week, raid the retirement system, FIRE THE POLICTICAL HACKS THAT ARE MAKING THE BIG BUCKS!
We are lucky he is only talking to Leadership that has little to do in the Senate, since the last failure of Williams to stop tax increases. His party members are unlikely to want to help in keeping this horrible spending plan in place for all the Democrat regions of the state.
They have been raiding the retirement system for the past 20 years. That didn’t seem to help. Sad!
I just wonder how much taxes dollars are spent in all those state vehicles that used by employee our private use. Hell they are parked in private drives and seen being used on the weekends. I thought state business ended on friday and resumed on monday
i’m so sick of this. eventually NO one will have a job or money or housing or insurance or food except the legislators.
He had better start laying off state workers and elected officials now!
Can’t lay off state workers – they provide services to the people who need help because they don’t have a job. Duh!
But he still has time to raise the prices for the Derby breakfast. How about $2 for a sausage biscuit?
He could certainly start making some cuts now by eliminating a lot of these non merit positions. All of these positions need to be looked at closely to determine if these people are needed and qualified. The majority of non merit positions provide no direct services to the taxpayer, but are simply figure heads, who usually know very little about the agency they are working for. At the very least combine some of these agencies to reduce the number of ‘figure heads’ there.
How about we raid the retirment funds from the private sector? We’ve been doing it to the state employees for years. Incase you didn’t know, they self fund this system. 5% of their salary goes into the fund. It hasn’t had taxes dollars put in it for years. And how about we lay off employees from the private sector for a week and put their pay towards the shortfall. We are so quick to take away state employees benefits and pay. They have bills as well you know. FYI, I am not a state worker, just some one with common sense.
Thank you Renea for showing some common sense and realizing that state employees are the first ones singled out for ‘cuts’. I am a state employee and I am tired of the fact that people blame us for problems that we didn’t create. The state has failed to pay their part into retirement for years, not to mention raiding it every time they can’t manage their money. I should point out that Corrections and State police pay in 8 and 11% of their salaries into the system, only to have do nothing legislators get their hand in the till.
Also, State employees pay taxes just like everyone else. It has been said for at least 20 years that the state tax system needs reform. If folks would demand real reform and demand that our legislature and our ‘leaders’ actually do something about our tax code we wouldn’t be seeing problems of this extent. Robbing Peter to pay Paul doesn’t work and never will. As Renea said, let’s raid the retirement and cut the benefits of private sector employees and see if they think that’s fair.Remember – we don’t get services, schools, public safety and roads for nothing. I have problems with the way money is spent and ‘managed’ by our ‘leaders’. If all of us demand accountability and real reform from our ‘leaders’, we will make a difference. But if we keep voting people in that have done nothing constructive about these problems – that they have known about for many years – we deserve exactly what we are getting. Instead of putting all this on the backs of state employees, put it on the backs of those who have actually caused the problem – our so called ‘leaders’ in Frankfort.
Removing the state income tax and going to a sales tax entirely is not only regressive, it’s dumb. Look at the other side of our southern border. Tennessee faired worse than Kentucky in the last fiscal year and they will fair worse in the upcoming fiscal year. Sales tax revenue is more volitale in tough economic times and has no guaranteed stability. Further, it’s incredibly regressive to lower income families. We need major tax reform in this state, but don’t get rid of the income tax. We certainly need the money.
maybe he can just raise the tax on cigarettes and alcohol again that is what they aways do. maybe he could collect a few more taxes on all that property that stumbo has at the golf corse for sell at 50k per lot i bet it is not appraised for that much at the p.v.a. office. maybe he could just get rid of some of those high paying jobs that he keeps handing out to his friends. he might be able to do like the rest of us have had to do and just watch what the ______ he spends.
I agree, CJ. We need Not to go to sales tax only. You mention Tenn. The sales tax there has gone up to 11%! I bought groceries the last time I was in Pigeon Forge and I nearly died. 11%. Here in Kentucky, as everyone knows, we don’t pay sales tax on most of our groceries. You can bet the sales tax will go up astronomically if they do away with income tax. You think people are hurting now…
Let’s see if Beshear can blame this on Ernie. These criminal politicians are all alike. As long as their cronies have their big paying jobs in state govt., to hell with everyone else.
People LISTEN, Beshear has to get gambling into this state or else. I know that the accounting office in Frankfort are a bunch of book cookers. Do not believe this nonsense. Beshear made a promise to get gambling into this state by the gambling mafia who financed his gubernatorial campaign. Every time a budget question comes up, Beshear talks expanded gambling. Please connect the dots!!!
Oh that’s a good answer! Just start laying off state workers like crazy. Obviously you don’t work for the state or have family members who work for the state. I guess you would then start griping because services provided by the state are either eliminated or cut back due to a staffing shortage. We run around like mad just to keep up with projects and provide services now as it is. That is because we cannot replace those who leave. Keep in mind – It’s not the workers’ fault for the budget issues! Getting rid of stateworkers will not solve a thing!
You’re a very skilled blogger….
I have joined your rss feed and look forward to seeking more of your great post. Also, I have shared your web site in my social networks!…
free gaia gold…
[...]just below are sites that we link to because we think they are worth visiting[...]…
Thanks for your kind informtion and sharing with us….
penis elongation…
[…penis male enlargement today has a lot of men confused. Many guys end up throwing their money away because they don’t exactly how penis male enlargement works making it easy to fall for the ridiculous claims some sites (such as those of penis pill…
harder erection techniques…
[…One of the most important things how you can achieve real and permanent success with penis male enlargement is to choose the most effective method and get the maximum out of this method. But most men do the exact opposite – they choose an untested …
enhancement pill…
[...Many guys wish they had a longer penis. This would increase their confidence as well as their manhood. Modern medical technology now makes permanent male enlargement possible...]…
christian singles dating advice…
[...There are currently hundreds of products out in the market today that can help develop the size of the penis. Many men are searching endlessly for techniques and advices that could improve the size of their penis...]…