FRANKFORT, Ky. — Kentucky may need to come up with more than a billion dollars to cover the state’s budget shortfall in the new fiscal year, but on the bright side, Gov. Andy Beshear (D) says the commonwealth didn’t end the last fiscal year with a deficit.

What You Need To Know

  • Kentucky ends fiscal year with no deficit

  • The commonwealth may still need over a billion dollars to cover shortfall in the new fiscal year

  • State can add to its rainy day fund by 18 percent

  • Beshear says biggest threat to budget is coronavirus, Kentucky needs help from Congress

“It means no cuts to education, health, public safety, or the judicial or legislative branch in the budget that we just ended,” Beshear said. “We would have been paying for that going forward.”

The Consensus Forecasting Group met in May and advised revenue may come up $457 million short of what was needed for the fiscal year ending June 30.

Beshear said general fund collections are $4 million short of expenses but there will be “much more coming in” over the next week.

The numbers, Beshear said, mean Kentucky can add to its “rainy day” fund by 18 percent. Beshear also said revenue from the Kentucky Lottery was higher than expected, which means $15 million more for students who received need-based funding to attend college.

“I know there’s people out there thinking about taking a gap year, about not necessarily moving forward with their education in the midst of this pandemic,” Beshear said. “We need more of you to get that higher education, to get that skilled trade.”

Beshear says the final quarter of the fiscal year was still the worst quarter in terms of revenue the state has seen since the 2008 recession, and he expects the state to face a $1.1 billion shortfall in the new fiscal year.

“The biggest threat to our budget moving forward is COVID-19, is people not wearing a mask, is people not doing their part and causing more business shutdowns,” Beshear said.

Beshear said Kentucky needs help from Congress, but he’s not optimistic about discussions in Washington over a new round of CARES Act funding to help with state and local budget issues.

He said Congress could free up hundreds of millions of dollars Kentucky received from the previous CARES Act if federal lawmakers remove restrictions on what the money can be spent on, but even that wouldn’t be enough to cover what he expects the state to lose this year.