By Jack Brammer
FRANKFORT –Revenue for the state’s General Fund, which pays for most state programs, dipped slightly in October while receipts for the Road Fund showed a bigger drop.
State budget director Jane Driskell said Tuesday that October’s General Fund receipts fell 0.4 percent compared to October 2012 collections.
Total revenues for the month were $772.5 million, compared to $725.5 million last October.
Receipts have increased 2.4 percent for the first four months of this fiscal year, which began July 1. They need to grow 1.6 percent over the final eight months of fiscal year 2014 to realize the official revenue estimate for the year of $9.52 billion.
Driskell said major revenue accounts continue to perform well, especially the sales and use tax. It increased at a 5.3 percent pace in October and has grown 3 percent through the first four months of this fiscal year.
“Despite the small decline in aggregate General Fund revenues in October, the major accounts performed well and revenues are slightly ahead of pace to meet the budgeted total,” Driskell said.
By Jack Brammer
FRANKFORT — Six months after unveiling a plan to quickly resolve payment disputes between medical providers and Medicaid managed care companies, Gov. Steve Beshear said the program is working.
“In both health outcomes and financial savings, Medicaid managed care is succeeding in Kentucky,” Beshear said Thursday at a Capitol news briefing.
In April, Beshear vetoed a bill designed to help hospitals and doctors receive prompt payment from three Medicaid managed care companies, saying it could have unintended consequences. The proposed law had the backing of many in the medical community but the legislature did not have time to consider overriding the veto.
Instead, Beshear implemented his own plan to address complaints by health providers. As a result, complaints are down, more payments are processed quickly and health outcomes continue to improve, said the Democratic governor.
Mike Rust, president of the Kentucky Hospital Association, was not immediately available for comment.
Beshear noted that next month marks the two-year anniversary of managed care in most parts of Kentucky, a practice now used in 47 states.
By Jack Brammer
FRANKFORT — Kentucky had a good month financially in August.
State budget director Jane C. Driskell reported Tuesday that receipts for the General Fund, which pays for most state programs, increased 3.8 percent in August compared to the same month last year.
Total revenue for the month was $663.7 million, compared to $639.1 million during August 2012.
General Fund receipts have increased 2.9 percent so far this fiscal year, which began July 1.
The official revenue estimate for this fiscal year calls for revenue to increase 1.9 percent compared to last year’s receipts. Based on August results, General Fund revenue needs to grow 1.7 percent for the rest of the fiscal year to meet the official estimate.
Sales tax collections grew by 5.8 percent in August, which Driskell said was “particularly encouraging” given declines last year.
“An increase in construction activity appears to have helped boost August collections,” she said.
Meanwhile, the state Road Fund, which pays for road projects, grew 8.3 percent in August with revenue of $141.3 million.
Road Fund revenue estimates call for a 5.1 percent increase in receipts for this fiscal year. Based on year-to-date collections, revenues must increase 5.1 percent for the rest of this fiscal year to meet the estimate.
By Jack Brammer
FRANKFORT – The future of Kentucky’s economy is “optimistically uncertain,” a state economist told a panel Wednesday that is trying to predict how much money the state will have for its next two-year budget.
Greg Harkenrider, deputy executive director of the Governor’s Office for Economic Analysis, told the non-partisan Consensus Forecasting Group that there seems to be some consensus among economists for a more robust economic recovery but “uncertainty continues to muddy the waters.”
He noted uncertainty with the markets and cautious hiring, investment decisions and household decisions.
He said the “golden boy” in the economy may be housing. “Housing led us into the recession and it may lead us out of it.”
Harkenrider and other state economists presented to the eight-member panel of independent economists a wide array of economic data to help it at its next meeting – Aug. 15 – to come up with revenue estimates for the next four years.
By Jack Brammer
FRANKFORT –The impact of the across-the-board federal spending cuts known as sequestration on Kentucky programs ranging from special education teachers to social workers is expected to be even more devastating next year, state education and human resources officials warned lawmakers Thursday.
They said the federal cuts will mean tough decisions for state legislators as they craft the state’s next two-year budget in Kentucky’s 2014 General Assembly that begins in January. The budget depends on state and federal tax dollars.
Education Commissioner Terry Holliday told members of the state legislature’s budget committees that the federal cuts to education this state fiscal year that began July 1 will amount to about $26 million.
Meanwhile, Beth Jurek, budget chief for the state Cabinet for Health and Family Services, said the cuts to the cabinet amount to about $8.2 million in fiscal year 2013 and between $17.7 million and $18.4 million the following year.
Hiren Desai, the education department’s associate commissioner for administration and support, said the impact of the cuts will be worse next year, particularly on school staffing, as school districts struggle with dwindling federal funds.
He predicted that “a perfect storm” will develop early next year when the public realizes the impact of the federal cuts and state lawmakers have to produce a balanced budget.
By Beth Musgrave
FRANKFORT — Kentucky finished the fiscal year that ended June 30 with $40.5 million more than originally expected, according to final revenue numbers released Wednesday.
The state won’t have a final tally of how much it spent until later this month, so it’s still not known if there is a budget surplus or deficit, said State Budget Director Jane Driskell.
This is the third straight year that Kentucky’s General Fund revenue has increased. Taxes and fees collected for the year totaled $9.34 billion, or 2.8 percent more than fiscal year 2012.
Revenue forecasters had projected the state would collect $9.3 billion. Legislators used that forecast to write the state’s two-year budget.
Tax collections showed growth in all four fiscal quarters, according to numbers released by the Office of State Budget Director.
By Beth Musgrave
FRANKFORT — Kentucky will receive $15 million from an online gambling company in a settlement of a 2010 lawsuit, Gov. Steve Beshear announced Friday.
The $15 million is in addition to a $6 million settlement from federal lawsuits against online gambling companies that was announced earlier this month.
The money could not have come at a better time. The state closes its books for the fiscal year on Sunday and it was still unclear on Thursday if revenues would meet projections for the year.
Kentucky filed a lawsuit against bwin.party in August 2010, alleging that the company illegally collected bets from Kentucky gamblers. The $15 million settlement comes from Kentucky bets placed before the operation shut down after Congress passed the 2006 Unlawful Internet Gambling Enforcement Act, which prohibited businesses from knowingly accepting payments in a bet or wager over the Internet.
The previous $6 million settlement stemmed from two federal lawsuits in Maryland and New York. In addition, Kentucky still has a 2008 lawsuit against more than 140 online gambling websites that is ongoing.
Beshear has said Internet gambling undermines the state’s horse racetracks and charitable gambling.
By Beth Musgrave
FRANKFORT — Kentucky’s General Fund is getting an unexpected $6 million windfall from the online gambling industry.
Two gambling websites, PokerStars and FullTilt Poker, will pay the state $6 million in a legal settlement that stems in part from the state’s ongoing effort to crack down on online gambling, Gov. Steve Beshear announced Wednesday.
The extra money will give the state a cushion if General Fund revenue does not meet projections in June, the last month of the fiscal year.
In 2008, the state sued to take over more than 140 gambling websites, saying the companies were operating illegally in Kentucky. It was the first lawsuit of its kind in the country.
By John Cheves — firstname.lastname@example.org
Gov. Steve Beshear’s administration is taking $2.5 million from shrinking coal severance tax funds and giving it to Lexington to help pay for the planning and design of Rupp Arena’s renovation.
The decision to divert coal tax money to downtown Lexington was little noticed as it was written into the state budget toward the end of the 2012 legislative session. Now that the state is preparing to deliver the money, however, it’s not sitting well in the financially hurting coal-producing counties, where these funds are meant for economic development.
“Mayor Jim Gray and the Urban County Council’s raid on our coal severance funds for their project is only further proof that Eastern Kentucky coal has done and continues to do a lot more for Lexington than Lexington does for Eastern Kentucky,” said Pike County Judge-Executive Wayne Rutherford.
The severance tax is a levy Kentucky collects on coal as it’s removed from the ground. The state keeps much of it, but coal-producing counties are supposed to get a proportional share of the money to assist their local governments and help diversify their economies beyond mining.
Statewide, coal tax receipts eroded during the past two years, especially in Eastern Kentucky, where many mines have closed. The state has collected $213 million in coal severance taxes during the past 11 months, down 23 percent for the same period a year ago. The double whammy of rising unemployment and falling severance taxes is forcing coal counties to slash budgets through layoffs, program closures and other means.
By Beth Musgrave
FRANKFORT — Kentuckians could be playing keno, a continuous bingo-style lottery game on an electronic terminal, in hundreds of restaurants, bars and bowling alleys as early as October.
The legislature’s Government Contract Review Committee on Tuesday voted 4-3 along party lines to approve a $635,000 contract amendment for lottery vendor GTECH to provide keno in Kentucky by October 19. The vote was along party lines with Democrats voting for the contract and Republicans voting against the measure.
The Kentucky Lottery Corp. board voted to offer keno in March when the legislature was debating whether to use proceeds from new lottery games — including keno — to shore up the state’s ailing pension system. The legislature ultimately approved changes to the tax code to help fund the pension system and did not rely on expanded lottery games.
Still, the Kentucky Lottery pushed ahead with plans to add keno.