Governor Matt Bevin signs budget reduction order for $152M shortfall

07/14/2017 04:04 PM

Gov. Matt Bevin signed a budget reduction order on Friday to end the fiscal year with a balanced budget.

On Monday Bevin’s budget office announced that the final fiscal year revenue was $138.5 million shy of budgeted predictions, falling 1.3 percent short of official estimates for the fiscal year. Analysts had predicted 2.7 percent growth over the fiscal year.

In a press release, the Governor’s Office says the shortfall was actually higher. Citing a lower than expected lapse of debt service, Bevin’s office said the total shortfall was $152.2 million.

Bevin used this shortfall to further his call for pension and tax reforms.

“This year’s budget shortfall validates the need for conservative spending plans, and it dramatically underscores the critical need for fixing Kentucky’s broken pension systems and modernizing the state’s tax code,” Bevin said in a statement. “A solid foundation is essential before the Commonwealth can reach its full potential.”

In order to balance the budget, spending in all three branches of government were reduced $59.3 million, $77.3 million was transferred from various excess restricted funds, and $15.5 million came from General fund lapses and fund transfers in excess of budgeted amounts, according to a news release from the Governor’s Office.

Bevin’s order didn’t take money from the state’s Budget Reserve Trust Fund.

“We are expecting an ongoing challenge with revenues in the next fiscal year and the next biennium,” State Budget Director John Chilton said in a statement. “Today’s actions by the Governor responsibly preserves the Rainy Day Fund as we prepare for the tight fiscal environment in front of us.”


Subscribe to email updates.

Subscribe and get the latest political intelligence delivered to your inbox.