FRANKFORT, Ky. — Kentucky had many needs even before COVID-19 hit. 


What You Need To Know

  • State lawmakers return to Frankfort Jan. 5 for the new legislative session

  • Lawmakers will be tasked with figuring out a spending plan for the next budget year

  • Research director for Kentucky Center for Economic Policy says once federal aid from pandemic dries up, economic picture will look grim

  • Report says Ky. has increased needs in education, Medicaid spending, corrections, and human services

“We have a backlog of budget needs from over a decade of cuts,” said Ashley Spalding, research director with the Kentucky Center for Economic Policy. “We are not funding our public education system adequately.”

And the pandemic is only complicating matters.

State lawmakers will return to Frankfort on Jan. 5 for the new legislative session, where they will be tasked with figuring out a spending plan for the next budget year, which starts in July.

The legislature typically passes a two-year budget during even-numbered years, but when the coronavirus outbreak in Kentucky started in March, lawmakers decided to go with a one-year plan because of worries about the economy.

Spalding said once federal aid stemming from the pandemic dries up, the economic picture will look grim.

“So as we go into session without additional federal aid and with these great budget needs, and with a question around state revenue, we certainly have a lot of concerns,” Spalding said.

A report Spalding co-authored said Kentucky has increased needs in education, Medicaid spending, corrections, and human services, all while revenue fails to grow at the same rate as the economy.

“We’re not just going to bounce back to where we were easily,” Spalding said. “It’s going to take time, and it’s going to take less time if we have the revenue that we need to do so.”

She said those concerns could be addressed with new revenue-raising ideas, or rolling back some recent tax reforms to bring in more cash for the state.

Meanwhile, Kentucky’s Budget Reserve Trust Fund, the state’s “rainy day fund,” is the highest it has ever been: around $460 million according to Gov. Andy Beshear last month. Spalding says it’s worth digging into.

“It’s called the ‘rainy day fund;' it’s now the time to use those resources. It’s raining,” Spalding said.

A pandemic that, even once it’s over, will still be costly to deal with.

Beshear is expected to give a budget address on Jan. 6, the day after the session begins.

Lawmakers have until the end of March to pass a budget.