From Kentucky Public Radio’s Tony McVeigh
Kentucky still faces serious budget deficits, but the red ink may not be as bad as previously thought.
Six economists who advise Gov. Beshear and legislative leaders are revising upward their October revenue estimates. Consensus Forecasting Group Chairman Larry Lynch says the economy’s picking up, but he’d still like to see more movement on jobs.
“First what happens is, hours increase. Generally speaking, people start increasing people’s hours first. Therefore their wages increase. Therefore income taxes increase and perhaps spending. Eventually, employment will pick up. We do think employment will begin to grow in the next biennium – perhaps not this year,” Lynch said.
Despite the revised revenue projections, the state still faces a projected deficit of $100 million this fiscal year and nearly one billion dollars in the next biennium. The numbers will be used to adjust the current budget and build a new one.