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Mon July 20, 2009
State Touts "Balanced Budget" At Close Of Fiscal Year
By Tony McVeigh
Frankfort, KY – Earlier this year, Kentucky lawmakers approved budget cuts, a raid on the rainy day fund and tax hikes on alcohol and cigarettes to balance the state budget. But when the books on FY 2009 closed on June 30, the commonwealth still faced a $56 million deficit.
To offset the shortfall, the state used unspent Medicaid dollars, which surfaced thanks to a higher federal match rate. A $37 million shortfall in the road fund was offset through the use of debt service and administrative savings.
The state avoided using federal stimulus dollars, but those are being used to help reduce a $1 billion shortfall in the current fiscal year. That still leaves at least $300 million in stimulus funds that can be used in the next biennial budget.