Financial Troubles
David Adams has a good find over at KyProgress:
The Lexington Herald Leader and the Louisville Courier Journal were too busy this weekend to print it, but bond rating agency Fitch had this to say about Kentucky:
"The Negative Outlook reflects plans to continue to deplete fund balances and virtually drain the budget reserve trust in the current biennium. Further, Fitch remains concerned about the weakened pension funding levels and the commonwealth's rising debt position as an additional $1.65 billion in debt has been authorized for the biennium."
I'd like to bullet out these notes with specifics:
- "virtually drain the budget reserve trust in the current biennium"
The biennial budget spends $191 million of the Budget Reserve Trust Fund, dropping it from $215 million to only $24 million.
- "weakened pension funding levels"
After no action on pensions during the 2008 Regular Session, the General Assembly passed a bill in Extraordinary Session committed to actually funding pension system deficits in future budgets (just not right now).
- "the commonwealth's rising debt position "
Appropriation supported debt service as a percentage of total revenue is projected by the budget office to average 6.1% in this biennium, a higher level than any in history and a 17% increase over FY 07-08.
