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.

"This Budget is Inseparable From This Recovery"

UPDATE, 6 a.m.: Click here for the video.

Click here for full transcript.

Excerpts from President Obama's opening remarks for tonight's 8 p.m. EDT press conference:

[W]e’ve put in place a comprehensive strategy designed to attack this crisis on all fronts. It’s a strategy to create jobs, to help responsible homeowners, to re-start lending, and to grow our economy over the long-term. And we are beginning to see signs of progress.

The budget I submitted to Congress will build our economic recovery on a stronger foundation, so that we do not face another crisis like this ten or twenty years from now. We invest in the renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil. We invest in our schools and our teachers so that our children have the skills they need to compete with any workers in the world. We invest in reform that will bring down the cost of health care for families, businesses, and our government. And in this budget, we have made the tough choices necessary to cut our deficit in half by the end of my first term – even under the most pessimistic estimates.

At the end of the day, the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led to a narrow prosperity and massive debt. It’s with a budget that leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest.

That’s what clean energy jobs and businesses will do. That’s what a highly-skilled workforce will do. That’s what an efficient health care system that controls costs and entitlements like Medicare and Medicaid will do. That’s why this budget is inseparable from this recovery – because it is what lays the foundation for a secure and lasting prosperity.

We will recover from this recession. But it will take time, it will take patience, and it will take an understanding that when we all work together; when each of us looks beyond our own short-term interests to the wider set of obligations we have to each other – that’s when we succeed. That’s when we prosper. And that’s what is needed right now. So let us look toward the future with a renewed sense of common purpose, a renewed determination, and most importantly, a renewed confidence that a better day will come.

The Liberal Reality in Obama's Budget

In a PG-rated post, the Rude Pundit culls from President Obama's budget proof that Liberal Reality is back in charge.

Over and over in this budget, in domestic issues, the Obama administration is demonstrating that liberalism deals in reality, in the lived existences of average people, and not in the realm of ideologically-defined social engineering, as conservatives would have it. The climate is changing, "sexual preference" is a protected category, and abstinence-only education has failed. These are simple facts. Denial piled upon denial has brought us here. Now their consitituents need to tell Republicans to help clean up their own fucking mess.

Read the whole thing.

Naked Budget

Remember all the fun we had every March when George W. Bush would post his proposed budget online and we could scroll through the details, finding all the corporate giveaways and crony contracts and social welfare cuts to call to everyone's attention and get our congress critters to deal with?

No? Oh, yeah, that's right: Smirky/Darth's budgets were all kept secret from, you know, we the people.

No more. President Obama's proposed 2010 budget is online. Every detail. Naked. Uncut. In front of the Flying Spaghetti Monster and everybody.

In keeping with my commitment to make our government more open and transparent, this budget is an honest accounting of where we are and where we intend to go. For too long, our budget has not told the whole truth about how precious tax dollars are spent. Large sums have been left off the books, including the true cost of fighting in Iraq and Afghanistan. And that kind of dishonest accounting is not how you run your family budgets at home; it's not how your government should run its budgets, either. We need to be honest with ourselves about what costs are being racked up -- because that's how we'll come to grips with the hard choices that lie ahead.

Full remarks here.