LOUISVILLE — The state budget director announced Friday the state finished the fiscal year with a $70.6 million surplus.
However, Budget Director Jane Driskell cautioned that doesn’t mean next year will be an easy one for the state budget.
Driskell attributed the surplus primarily to decreased spending by “cash-strapped state agencies” and “a small bump in General Fund revenues.”
But she said the new budget year, which began July 1, includes the same budget cuts in place last year which forced agencies to cut back on spending. Driskell said that will continue the challenge facing state agencies to deliver services while the costs of doing so increase.
General Fund revenues were up 2.8 percent for the year, producing $40 million more in revenue than projected. Spending cutbacks accounted for the other $30.6 million, according to information from Driskell’s office.
“In the 2012-13 fiscal year, most state agencies were reduced 8.4 percent, and those cuts are continued in the new budget year,” said Driskell.
“Even as the economy recovers, our limited revenue growth is not keeping pace with increases in required expenses such as pension costs and Medicaid. State agencies will have to continue to manage those reductions in the coming year.”
The enacted budget requires any surplus remaining after unexpected expenses for unplanned events such as weather disasters to be placed in the Budget Reserve Trust Fund usually called the Rainy Day Fund.
Gov. Steve Beshear is using $45 million of the surplus to pay for those “necessary government expenses” as they are called in budget language.
The remaining $25.6 million will go into the Rainy Day Fund, bringing the total to $147.3 million. But the budget for the new fiscal year appropriates $49 million from the reserve which will reduce the balance to $98.3 million, less than 1 percent of the enacted budget.
The Road Fund surplus was $17.7 million due to lower spending than budgeted, while Road Fund tax revenues came in $8 million less than budgeted. The $17.7 million surplus will be deposited into the state highway construction account.
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