Worst Yet to Come: Nothing But Bad News For State Budget

One of the many frustrations of state government work is the inability of most people to realize, much less appreciate, how much state government does to make their lives easier every day. Even services provided by your city or county government are supported with funding from state tax dollars.

But we're about to find out just how much we get from the state budget - after it gets slashed down to nothing next year.

Tom Loftus has the bad news:

With no economic recovery in sight and federal stimulus money dwindling, the budget that the 2010 General Assembly must write early next year is likely to be the most difficult in decades.

In recent years — as revenue failed to meet projections — Kentucky has used its Rainy Day fund and the stimulus money to avoid mass layoffs of state workers and deep funding cuts for its highest priorities, including the public schools.

But now the Rainy Day Fund is empty. And federal stimulus dollars are scheduled to run dry in the middle of the next fiscal year.

“It's most definitely the worst budgetary outlook I've ever seen,” said State Budget Director Mary Lassiter, who has worked in the budget office for 27 years. “The outlook is a lot worse than it was two years ago.”

SNIP

Revenues to the state General Fund are projected to fall more than $1 billion short (about 12 percent) of the roughly $9 billion required in the 2009-10 budget as enacted by the 2008 General Assembly.

Beshear and lawmakers are using $787 million in stimulus dollars to help fill that hole.

But only about $485 million in stimulus funds will be available to Kentucky in 2010-11 — and none at all in 2011-12.

State tax revenues — which have shrunk the last two years — are expected to begin growing again next year, but not nearly fast enough to plug the gap when stimulus funds end.

Meanwhile, the state's failure over years to deal with the consequences of budget cuts to essential services is starting to present overdue bills.

There already are signs of how high that price may be: the state court system last month laid off 47 workers and warned that more layoffs are possible; legislators complained last week that a 2007 law to protect the safety of social workers isn't being fully funded; and House Speaker Greg Stumbo said reserve funds held by local school districts may have to be tapped to supplement state revenues.

Read the whole thing.

Do I really need to say that our political so-called leaders have no intention of using this crisis to seek long-term solutions? Like tax reform?

No, you can rest assured that rich individuals and corporations will continue to get a free ride in this state on the backs of the poor, low-income, middle-class and small businesses.

And be sure to thank your repug and Blue Dog Senators and Representatives, who demanded that hundreds of billions of dollars to support state budgets were stripped from the stimulus bill last February. Yeah, that's working like a charm.

The only question is how long it will take before the complete gutting of public services - highways, schools, police, firefighting, water treatment, food safety, electricity infrastructure, ad infinitum - empties the state of the few people who still have the resources to pack up and leave.