Consensus Forecasting Group preliminarily anticipates $219M surplus in current spending year
08/14/2015 09:59 AM
FRANKFORT — Less than a month after Gov. Steve Beshear announced an $82.5 million deposit into the state’s Budget Reserve Trust Fund, the non-partisan Consensus Forecasting Group expects Kentucky’s general fund to end the current fiscal year with a $219.2 million surplus based on revenue estimates.
The panel, which in December will give the next gubernatorial administration and the General Assembly estimates to write the next two-year budget, moved ahead with a middle-of-the-road, or “control,” forecast for both the general and road funds, which is predicted to face a $139.2 million shortfall and see a 7 percent drop in revenue growth in the current fiscal year.
The estimates, presented Thursday by the state budget director’s office, show expected growth in the general fund of 3.2 percent in fiscal year 2016, then 2.7 percent growth and 2.8 percent growth in fiscal years 2017 and 2018, respectively.
That preliminary estimate would give officials $21.4 billion in general fund receipts for the upcoming biennial budget, but final figures will be approved in December.
Alan Bartley, an economics professor at Transylvania University and member of the panel, said he reviewed the group’s action ahead of the 2014 budget-writing session and found that while some specific revenue estimates didn’t come to fruition, the “control” estimate provided by consultant Global Insight wasn’t “too far off, it seems like, in total.”
“I’m probably OK with the control,” Bartley said. “I would probably say if anything I would think that the pessimistic should be weighted a little bit more … but the ‘control’ last time seemed to be pretty good in total.”
The “pessimistic” forecast anticipates a $68.1 million budget surplus in the current fiscal year and $20.8 billion in general fund receipts for the upcoming two-year budget cycle.
Beshear, in a statement, said the anticipated budget surplus “is more tangible evidence of the impact of the improving economy.”
“The Commonwealth still has challenges, and we will continue to be aggressive to strengthen the economy, build a stronger workforce, advance education programs and offer affordable, quality, comprehensive health care to all Kentuckians,” he said. “Today’s prediction from this independent group of economists is undisputed evidence that Kentucky’s economy is rapidly improving and our strong fiscal management has reaped benefits for future generations.”
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