Kentucky Faces Major Budget Shortfall Amid Coronavirus Pandemic
Kentucky is facing a massive budget shortfall as the coronavirus pandemic has diminished the amount of tax revenue the state brings in.
Kentucky Budget Director John Hicks announced on Thursday that state tax revenues will likely be between $318.7 million and $495.7 million lower than initially predicted by the end of the fiscal year on June 30. That’s a 3.8% to 4.7% drop.
Hicks also said that tax revenue is expected to fall between 10.5% and 17.2% in the first two quarters of the next fiscal year.
During his daily briefing on Thursday, Beshear said he talked to Senate Majority Leader Mitch McConnell to ask for Congress to pass a bill sending money to help prop up state budgets.
Beshear said the numbers suggest next year will be very difficult.
“This is a real threat. Not just to where we are right now, but it’s a real threat to helping us rebuild. Without federal assistance, our recession will be longer. Our unemployment will be greater,” Beshear said.
Kentucky state government received about $1.6 billion in the coronavirus relief package that passed out of Congress in March, but those funds are dedicated for coronavirus response.
Congressional leaders have been debating a new relief package over recent weeks. McConnell has expressed skepticism about sending more money to states, criticizing requests as “blue state bailouts.”
McConnell has suggested allowing financially struggling states to file for bankruptcy—a process that is not currently allowed—or tying funding to a provision that would provide businesses and employees legal immunity to coronavirus-related claims.
Beshear said he appreciates McConnell hearing him out, but he doesn’t think an agreement is close.
“He understood and said that there were more discussions going on in Washington D.C.,” Beshear said. “I want to push the things that we need, I don’t want to be in the middle of a Washington D.C. debate.”
Beshear announced 174 new cases of coronavirus in Kentucky on Thursday, for a total of 4,708. There were five new deaths, for a total of 240.
As many Kentucky businesses prepare to reopen May 11, Beshear again said that child care centers will not be allowed to reopen.
“Unfortunately with the way this virus works right now, is if we have child care right now in the form it was before, we can’t have healthy at work,” Beshear said. “We’re at a stage where it’s too dangerous.”
Josh Benton, deputy secretary of the Education and Workforce Development Cabinet, said the inability to access child care might factor into how the state determines unemployment as businesses begin to reopen.
“We’re going to be flexible on unemployment insurance on two issues, and probably some others. But specifically, child care issues, as well as health issues. Especially those at high risk. There’ll be more information to come on that,” Benton said.
Benton also said the state is still working through a massive backlog of unemployment claims. He said there are about 9,000 people who need to submit additional identification documents to the state.
Beshear also said public pools and communal pools in apartment complexes will not be allowed to reopen in May or June, because people can’t socially distance there.
Beshear announced that people with SNAP benefits—previously called food stamps—will now be able to use them for online grocery orders.