Budget Shortfall Guessing Game; Horse and Political Races
by John Gregory | 06/30/14 2:51 PM
It's an old story that no one in Frankfort wants to hear again: a revenue shortfall that will force spending cuts in Kentucky's biennial budget.
The panel on this weekend's Comment on Kentucky discussed the options Gov. Steve Beshear has for bringing the budget back in balance in the face of what’s likely to be at least a $28 million dip in revenues.
Although the state constitution requires the budget to be balanced at the close of the fiscal year, which is midnight tonight, the state's books won't actually be closed until mid-July. Tom Loftus of the Louisville Courier-Journal says some in state government fear that once the June revenues are tallied, the deficit could be as high as $100 million.
Since the shortfall wasn't discovered until a few weeks ago, officials can't really make any spending cuts this late into the fiscal year. The governor could tap part of Kentucky's Rainy Day Fund. Loftus reports it has about $98 million, or about 1 percent of the state's total budget. (He says ratings agencies prefer to see about 3 percent of a state's budget held in emergency reserve.) Another option would be to lower the starting balance of next year's budget, which would simply roll any necessary spending cuts into the new fiscal period.
Loftus says revenues had been growing at about a 2.5 percent to 3 percent rate over the past few years, but this year the increase has only been about 1.1 percent. He says the revenues must grow by at least 2.2 percent for the budget to remain in balance.
Fancy Farm Preparations Underway
Polling continues to show a tight race for U.S. Senate between Democratic challenger Alison Lundergan Grimes and incumbent Sen. Mitch McConnell. Grimes got some help this weekend from Massachusetts Sen. Elizabeth Warren, who campaigned with Grimes at the University of Louisville on the issue of college affordability.
The next big event on the political calendar is the annual Fancy Farm picnic on August 2 in Graves County. John Wright of the Murray Ledger and Times says organizers expect significant national media coverage of this year’s event because of the closely watched Senate contest. Kentucky Supreme Court Justice and western Kentucky native Bill Cunningham will emcee the political speeches, which will be held on an expanded stage to give speakers more elbow room.
Politicians will have a chance to test their messages before taking the stage that Saturday afternoon. Wright reports Republicans will host a breakfast that morning at Graves County High School, while Democrats will encamp at Mayfield High School. Wright says nearby Murray has already been a hotbed of political activity. The community hosted Texas Gov. Rick Perry at the Lincoln-Reagan Dinner last March, and the Jefferson-Jackson Dinner earlier this month featured Democrat Grimes.
Breeders' Cup Returns to the Commonwealth
Lexington's Keeneland will get its first opportunity to host the Breeders' Cup in 2015. Janet Patton of the Lexington Herald-Leader says the annual Thoroughbred racing championships was devised by the late horse breeder and Gainesway Farm owner John R. Gaines. The Cup was last held in Kentucky in 2011 at Churchill Downs.
Patton reports that Keeneland has long wanted to host the event but is a smaller facility than most tracks that stage the races. She says Keeneland expects about 50,000 people to attend and to accommodate that crowd, the track will install 7,000 temporary seats. While general admission tickets will be limited, additional tailgating spots on the Keeneland grounds may be offered. Patton says track officials also expect the event to boost revenues at the November breeding stock stales, which will begin the Monday after the races.
Landing the Breeders' Cup softened the blow to Lexington after the Kentucky Horse Park lost its bid to host the 2018 World Equestrian Games. Patton attributes that decision to sponsorship conflicts: Watchmaker Longines is title sponsor of the international competition, while competing watchmaker Rolex sponsors the stadium facility at the horse park.
Watch the full Comment on Kentucky program to hear more about these issues, as well as discussion about a new tax break for car buyers, and proposed legislation to protect Kentuckians from drone surveillance.