Gov. Andy Beshear announced Wednesday that the state is looking to close out fiscal year 2020 without a shortfall, despite the continuing challenges presented by efforts to fight COVID-19.
The governor said the official numbers for fiscal year 2020 — the filing for which was extended from April 15 to July 15 this year due to the pandemic — will show a surplus. He noted that it is a marked improvement from May 22, when a revised revenue estimate expected a shortfall of $457 million.
In immediate practical terms, this improved economic footing means:
- No budget cuts to K-12 education, post-secondary education, and health and public safety, and
- No cuts to the Judicial or Legislative branch budgets.
While staying focused on the pandemic fight, Beshear said he was pleased to report some good economic news.
Beshear credited the hard work of Cabinet leaders and state agency officials as the state’s General Fund revenues for fiscal year 2020 came in far higher than was expected only months ago.
The governor praised the administrators of all state agencies, who were asked to reduce spending by a 1% annualized amount in the last two months. He said they did better than that, by limiting hiring and holding the line on discretionary expenses without reducing levels of service.
He said the Office of the State Budget Director will issue final end-of-the-fiscal-year numbers and details after the books officially close this weekend.
Beshear said the cost-saving moves also were expected to result in a more than 18% increase of the state’s rainy day fund, the Budget Reserve Trust Fund, and an increase in lottery revenues would result in another $15 million for need-based student financial aid this coming school year.
Beshear also reiterated his appeal to congressional leaders to provide additional federal relief through the Coronavirus Aid, Relief and Economic Security (CARES) Act or other means. Without such funding, he warned that budget cuts in fiscal year 2021 would be deeper even than those implemented during the Great Recession.
