State Balances Fictional Budget Shortfall With Fictional Budget Maneuvering
According to the budget office:
The state was in the black for the fiscal year that ended June 30, but only because it received a loan from the Medicaid program, which had additional money from the federal stimulus program.
The state was $55.7 million short in general fund dollars and nearly $37 million short in Road Fund money -- which funds transportation projects.
To balance the general fund shortfall - which funds the bulk of state government - Kentucky used unspent general fund dollars that were allocated to the state's Medicaid program. Medicaid, an insurance program for the poor and the disabled, is paid for through federal and state dollars. In general, the state picks up approximately 30 percent of the tab and the federal government pays 70 percent. However, the federal government retroactively increased its share of the federal government's portion of the tab.
That means the state had additional state money in that program that it could allocate for the shortfall, said Mary Lassiter, the state budget director.
Which is all very misleading.
In reality, the Consensus Forecasting Group met on November 26, 2008 and released a forecast of general fund revenues of $8.4299 billion for fiscal year 2009. Then, in February 2009, the General Assembly passed a budget bill based on that forecast. Then, ten days ago, the budget office announced that revenues actually were $8.4264 billion.
That's a $3.5 million difference, not a $55 million difference.
Blah, blah, blah Medicaid blah...
There was no shortfall to plug. New taxes, old revenues...all that matters is that revenues met expectations. Don't let Beshear and his funny buddy Abramson tell you otherwise.
