Legislature Ignored 2006 Warnings Of Current Fiscal Crisis

FRANKFORT, Ky. -- The budget crisis Kentucky now faces was not merely predictable back in April 2006, when the General Assembly approved the current spending plan, It was actually predicted reports the Louisville Courier-Journal in its Sunday edition.

Just after the 2006-08 budget was passed, then-Gov. Ernie Fletcher and his staff said it used surplus money and other budgetary devices to prop up spending that could not be sustained in the year that followed the budget.

They estimated that the first year of the 2008-10 budget would have a hole of $600 million -- very close to the $525 million problem that Gov. Steve Beshear says he is now facing for 2008-09, reports the C-J.

Based on the comments by Fletcher and his budget team, a Courier-Journal story published on April 24, 2006, said:

"Unless the state's economy grows at a much higher-than-normal rate -- and much higher than projected -- lawmakers in 2008 will not have money for teacher raises, university improvements or other funding increases without raising revenue or making painful spending cuts in other areas."

That economic growth has not taken place. In fact, Beshear has said the housing slump and lagging employment in Kentucky, among other things, are to blame for the 0.4 percent decline in revenue so far this fiscal year, which began last July 1. Mary Lassiter, a member of Fletcher's budget staff who was promoted to budget director by Beshear, said in an interview last week that what amounts to the imbalance in the current budget caused a problem in writing the next one, the newspaper reports.

Senate President David Williams, R-Burkesville, rejects the suggestion that the 2006 legislature went on an irresponsible spending spree.

"It's just a continuing problem that you have," he said. "You have a lot of people that express needs, and we never appropriate as much money as most people want."

Only two of the 138 legislators voted against the budget in 2006 -- Rep. Stan Lee, R-Lexington, and Rep. Jim DeCesare, R-Bowling Green. Both said they voted no because it spent more money that it took in and incurred too much new debt.

"We spent too much. It's the General Assembly's fault," Lee said in an interview last week, reports the Courier-Journal.

The second reason for the current crisis is the weak revenue growth since last spring.

Average annual revenue growth for the past 20 years has been about 5.5 percent, reports the Louisville Courier-Journal.

Copyright: The Louisville Courier-Journal
http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20080113/NEWS0101/801130484/1008/NEWS01


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