Beshear plugs $90.9 million shortfall in state budget using a mix of state agency and unspent general funds
07/16/2014 05:10 PM
Gov. Steve Beshear announced Wednesday he had again re-balanced the state’s budget using millions in state agency funds, unspent General Funds and cash from the Budget Reserve Trust Fund to plug a nearly $91 million budget shortfall.
In his 14th re-balance of the budget, Beshear said he was focused on making the government “as efficient and as lean as possible.”
“And to protect as best we can the core services that offer help and hope to our people and represent important long-term investments in Kentucky’s future: education, health care and public safety,” Beshear said in a statement.
To re-balance the budget using a mix of reductions and money transfers, Beshear was able to plug the one-percent overall shortfall of $91 million.
They transferred $50 million from state agency funds which the governor’s office said were in excess of budget amounts, something they felt they could do under current law.
“The use of fund transfers is a valuable tool in how we manage and balance the overall budget of the Commonwealth, and one that keeps us from making deeper cuts to state agencies,” Beshear said. “The recent ruling by the Kentucky Supreme Court again affirms the constitutionality of this practice, thus ensuring much needed flexibility for the executive and legislative branches.”
The governor also used another $15 million from unspent General Fund appropriations which are expected to lapse to the General Fund in excess of the amount budgeted.
Executive branch agencies’ operating budgets, including participating constitutional offices, were also reduced in the cut backs by $3 million. The Judicial Branch General Fund budget was also reduced by $1.5 million and $287,600 will come from the legislative branch.
“The Governor will use $21.2 million from the Budget Reserve Trust Fund, also known as the Rainy Day Fund. After this reduction, the Rainy Day Fund will have a $77.1 million balance. The Rainy Day Fund is also the sole source of financing for authorized but unbudgeted necessary government expenses in Fiscal Year 2015.”
Click here to download the full budget reduction document: General Fund Doc.pdf
Sen. President Robert Stivers, R-Manchester, called Beshear’s budget reduction plan “appropriate”, but he said “the real problem is the downward spiral of Kentucky’s economy.”
“Our economy is being stymied by the policies created by the Obama administration. One need look no further than the 14.3% reduction in coal severance tax revenues to see the direct and disastrous impact of President Obama’s policies on Kentucky’s economy and state government revenues,” Stivers said. “Two years ago the Commonwealth collected nearly $300 million from the coal severance tax; this year that number was just $197.5 million. If this reduction had not occurred, or had not been as precipitous, there would have been no need for a budget reduction plan.”
Wednesday’s re-balance marks the 14th separate budget reductions Beshear has implemented, totaling nearly $1.7 billion since he has been in office.
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