kentucky budget

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Gov. Matt Bevin has proposed 9 percent cuts to most state government agencies over the next two years in an effort to reduce state spending by $650 million. 

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  Exceeding expectations, Kentucky has a $165.4 million budget surplus and revenue into the state’s general fund rose for the fifth consecutive year. The surplus is primarily due to more money collected from income and sales taxes.

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A west Kentucky lawmaker is looking to reform state election cycles in an effort to save the state potentially $50 million every four years and boost voter turnout.  

Kentucky's $91 Million Shortfall Explained

Jul 17, 2014
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Update: Beshear Cuts Budget to Balance $90.9-Million Kentucky Budget Shortfall

Kentucky Governor Steve Beshear signed a budget reduction order Wednesday, announcing that there would be a $21 million dollar transfer from reserves bringing the state's rainy day fund to $77 million. Murray State Distinguished Professor of Economics Dr. Jim McCoy serves on the Kentucky Consensus Forecast Group. He puts in perspective  the origins, anomalies, and implications of the Commonwealth's $91 million shortfall during Sounds Good.

Kentucky Revenue Shortfall Nears $91 Million

Jul 11, 2014
Wikimedia Commons, Public Domain

Kentucky’s general fund is short $91 million, and one of the driving factors is a decline in a form of income primarily used by the nation’s wealthiest individuals.

In 2012, U.S. Congress was preparing to take the country over the “fiscal cliff” over rising debt, rising healthcare costs and spending on the wars in Iraq and Afghanistan. To reduce the deficit, President Obama proposed raising the federal capital gains tax, which largely impacted the nation's wealthiest, prompting a massive sell-off by 2013.

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Making good on his pledge to reinvest in K-12 education, Kentucky Gov. Steve Beshear's biennial budget would restore public education funding to 2008 levels, with a pledge of $189 million in a budget greater than $20 billion.

But Beshear said his budget was was made possible in large part by a 5% cut across many state agencies.

Kentucky’s Council on Postsecondary Education is making a run at more funding for state colleges and universities.

The CPE will ask the legislature for 4.9  and 5.3 percent increases respectively for the upcoming two-year budget cycle. The request comes as higher education state funding has dropped by nearly a third since 2008.

Kentucky LRC

In just over four months lawmakers will be back in Frankfort for a full 60 day session.  This winter, legislators must approve a new two year budget.  While the state finished last year with a budget surplus, Senate Appropriations and Revenue Committee Chair Bob Leeper doesn’t anticipate any big increase in state revenue.  So, Leeper says building a budget will remain difficult.

“There’s so many factors that are affecting us, what’s happening in the eastern Kentucky coal fields, loss of jobs there, loss of income for people to go out and buy goods.  There’s any number of issues going on worldwide, nationwide that we can’t control,” said Leeper.

House Budget Committee Chair Rick Rand sounds a similar tone.  He said the growth predicted by state experts is not as “robust” as they had hoped.

Kentucky has ended the third consecutive fiscal year with General Fund revenue growth — continued good news for a state that had seen tax collections plummet during the economic recession.

Budget Director Jane Driskell said collections were up 2.8 percent to more than $9.3 billion for the 12-month period that ended June 30.

Kentucky’s General Fund revenue saw a sharp decline last month. Budget Director Jane Driskell says collections fell 5.2%, costing the state nearly $30 million. Coal severance tax revenue had the largest loss, with 24. 5%. Both individual income tax and cigarette tax revenue dropped about 14%. Driskell says 41% increases in corporate income tax and property tax collections failed to offset the losses.

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