Bracing for a dramatic downturn in its tax collections, Kentucky’s General Assembly has no choice but to pass a one-year budget and then regroup next year, said Sen. Damon Thayer, R-Georgetown.
The coronavirus pandemic and the massive shutdown of businesses statewide orchestrated by Gov. Andy Beshear has sent the state’s economy reeling. It is too early to determine the damage, but lawmakers and budget negotiators fear it will be severe.
“As our economy continues to face uncertain times, it was impossible for us to predict what our revenue would be in July of next year,” Thayer said. “Frankly, it’s impossible to predict what it will be in July of this year, but we went with the most pessimistic budget provided to us by the consensus forecasting group.”
The plan unveiled Tuesday before lawmakers reconvened Wednesday does not include raises for teachers, a Beshear campaign pledge. The forecast provided to lawmakers has a drop of about $130 million less in revenue than predicted earlier this year.
The plan maintains the current level of per-student funding under SEEK, the main funding formula for K-12 schools. The governor had hoped to increase the funding formula before the COVID-19 shutdowns.
The plan also freezes contribution rates for regional universities and community social services agencies. The plan fully funds contributions for public pension systems.
The one-year budget plan was suggested by Beshear’s budget director John Hicks, Thayer said.
“Passing a one-year budget instead of the usual two-year plan was a necessary step during the coronavirus crisis,” said the senator.
Passing a one-year budget enables lawmakers to meet their constitutional duty of passing a budget despite the uncertainty of state tax collections due to the closing of businesses and other scaled back operations due to the COVID-19 outbreak. The closings and cutbacks have forced thousands of layoffs causing unemployment benefits to soar.
The legislature reconvened Wednesday afternoon and was expected to take final action on a budget before sending it to Beshear. The General Assembly will meet again in April to take up any gubernatorial vetos.
The new budget takes effect July 1.
Mike Scogin can be reached at firstname.lastname@example.org.