Gov. reveals 50% increase in budget deficit – Plans special session

Nov. 22

FRANKFORT —The state’s projected budget shortfall has been upgraded in predictions by economists to $456.1 million. That represents a 5.1 percent decline in the $8.9 billion of revenue that was expected in the current budget.

 

The group of economists, known as the Consensus Forecasting Group, also projected a $104.7 million shortfall in the Road Fund on Friday. That is a decline of nearly 8 percent from expected revenue receipts.

 

 Gov. Steve Beshear warned that the blooming financial crisis may bring tax increases, layoffs and cuts to education and social services programs.

That represents about a 5.1 percent decline in the $8.9 billion of revenue that was expected.

 

The  governor said a special legislative session is likely in January to deal with the shortfall for this fiscal year, which ends June 30.

 

Lawmakers will return to Frankfort for four days in early January for an organizational session to select their leaders and then return Feb. 3 for 26 days of making law.

Williams said the House and Senate budget committees could work in January on the budget and all lawmakers could consider their work in February, avoiding a costly special session.

 

Governor Beshear said he is looking at a special session because only a majority of votes would be needed in each chamber to approve revenue measures in it, whereas, 60 percent of the votes in each chamber would be needed for such action in a 30-day regular session.

But Beshear said he would be willing to negotiate on the issue

 

However, Republican Senate President David Williams of Burkesville said no special lawmaking session is needed and challenged Beshear’s authority to address the crisis.

State law appears to give a governor the power to reduce expenses only when a shortfall is 5 percent or less of expected revenue.
Beshear said he disagreed with Williams’ contention and hopes to have a plan by early December to address the shortfall.

 

Williams told reporters Friday that he is willing to consider Beshear’s plan to increase the tax.

 

Williams said he hopes Beshear meets with legislative leaders instead of “running all over the state to tout a plan.”

 

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