A panel of economic advisers on Friday offered a gloomy view for the months ahead in Kentucky, fearing a worsening recession could cause state tax revenues to decline.
The Consensus Forecasting Group, made up largely of economists from the state's universities, held an information gathering meeting in Frankfort on Friday.
"Things don't look good," said Transylvania University
economist Lawrence Lynch, chairman of the group. "Just look at the
data coming out. There'll be a sign of hope one day and terrible
things the next."
The legislature uses the group's economic forecasts, which have
been remarkably accurate in the past, as the basis for revenue
projections. Members said they see little to be optimistic about
heading into next year, when lawmakers will craft the state's
two-year budget, largely because of signs pointing to problems in
the national and world economies.
Lynch said the panel will meet again Oct. 14 to make a
preliminary forecast that Gov. Steve Beshear's finance team and
lawmakers will use to begin the budgeting process.
Greg Harkenrider, deputy director of the Governor's Office for
Economic Analysis, said the economy clearly is fragile and that has
economists concerned about the potential for a double-dip
Lynch said economists are also watching closely the work of a
special congressional committee charged with finding, by
Thanksgiving, $1.5 trillion in savings over the next decade. If it
stumbles, or Congress rejects its plan, automatic cuts of $1.2
trillion over a decade would hit defense and domestic spending.
"Whatever it is, it's not going to help the economy," Lynch
said. "Whether they cut spending or raise taxes. I don't see any
option that can help the economy in the short run."
The Kentucky economists voiced frustration that they will likely
have to make their preliminary projections in two weeks without
knowing what the congressional committee will recommend.
(Copyright 2011 by The Associated Press. All Rights Reserved.)