State Facing Serious Shortfall

Tuesday, 29 December 2009 16:57

The state could be facing a budget shortfall of more than $1.5 billion over the next two years, according to Governor Steve Beshear.
On Tuesday, Beshear briefed legislators on the projected shortfall, saying it is greater than expected.
The governor said the estimated revenue growth projected by the Consensus Forecasting Group last week lacked some key expenses.
That included growth in Medicaid and new debt service on bonds authorized by the General Assembly.
Beshear said other significant costs that would push the shortfall even higher include: retirement contribution increases; increased cost of health insurance for state workers, teachers and retirees; prison population growth; courthouses coming online; and needs in our education system.
Beshear will present his plan to balance that budget next week.

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Comments (1)

Bob Rowland says:

2009-Dec-29 20:15

KY loses 0M to tobacco settlement

Much of the budget deficit could be erased by KY levying its own tax to replace KY's participation in a multi state tobacco settlement. About 8M is paid annually to the settlement on KY cigarette sales but KY only gets to keep about 7M. The other 1M goes to states like NY and CA under the terms of the settlement. KY could keep the entire 8M by withdrawing from the settlement and levying its own tax rather than continuing to pay the settlement tax. The terms of the settlement, known as the Master Settlement Agreement(MSA)clearly allow states to terminate their participation at anytime, for any reason, and without any penalty. For more information email: rorowland@lycos.com

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