While Kentucky is seeing a boost in the previous year budget thanks to tax revenue collected from the delayed tax return deadline, the state is facing “dire” issues in the new fiscal year because of COVID-19.
At his press briefing on Wednesday, Kentucky Gov. Andy Beshear said tax revenue coming in from tax returns for the 2019 fiscal year are allowing the state to end the year without the $457 million predicted shortfall.
He stated this means the money the administration asked K-12, post-secondary education, and health and public safety to hold back will not have to be cut and there will be an increase in the state’s “rainy day fund.”
The new fiscal year, however, looks very grim. Beshear said it is looking to be as dire as has been predicted with the first fiscal quarter being the state’s worst since the great recession.
The Consensus Forecasting Group recently estimated Kentucky will face a $1.1 billion shortfall in the year and Beshear said his administration has prepared a series of options with and without education funding but cuts could be the most drastic in the state’s history ranging from 13-30 percent.
To deal with this issue, the governor again suggested the federal government needs to step in and provide financial aid to states. He added if the federal government would do what they did during the recession in terms of funding, it would help avoid a lot of pain.