Kentucky state budget (2009-2010)
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Budget officials announced on July 21, 2010, that, at the close of FY2010, the state's general fund had a surplus of $29.7 million. The surplus was realized after lawmakers revised the budget and lowered revenue expectations by more than a billion dollars for the fiscal year.[1]
State Budget Director Mary Lassiter explained that the surplus funds are already spoken for, because the current state budget allows the surplus to be put in the state's Rainy Day Fund or spent on certain likely costs that are not funded in the budget. In FY2010, the state paid $39 million in such unfunded costs, including to the Kentucky National Guard and other disaster-response agencies. Given that seven counties experienced flooding early in FY2011, Lassiter said it was probable that all of the surplus will be needed for the same costs in FY2011.[1]
Budget Background
In Kentucky the legislature passes biennial budget bills which includes two fiscal years. However, the state's fiscal year begins July 1st and ends June 30th of the following year. The budget includes appropriations for the state's operating and capital budget and recommendations made by each state agency. Estimates of the General Fund and Road Fund revenues are compiled by the Consensus Forecasting Group. Prior to the Governor's approval the budget passes through first the House of Representatives and then the Senate for amendments. After a series of hearings the Governor can either approve the budget as approved by the Legislature or continue to amend the bill through vetoes. Once the budget is approved, amendments can be made to the budget bill as necessary. [2]
Budget figures
The following table provides a history of Kentucky's expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $21.5 [3] | $111.9 [3] |
| 2001 | $23.1[3] | $115.1[3] |
| 2002 | $24.8[3] | $120.7[3] |
| 2003 | $25.8 [3] | $124.9 [3] |
| 2004 | $26.9[3] | $131.7[3] |
| 2005 | $27.0[3] | $138.5[3] |
| 2006 | $29.5[3] | $146.4[3] |
| 2007 | $32.3[3] | $154.7[3] |
| 2008 | $35.3[3] | $162.4[3] |
| 2009 | $38.6* [3] | $171.0* [3] |
- NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
- See Kentucky state budget (2008-2009) for more details.
2008-2010 Biennium General Fund Appropriations $19.1 Billion[4]
| Category | Percentage |
| Education | 43.8% |
| Postsecondary | 13.7% |
| Medicaid | 13.3% |
| Other | 11.5% |
| Criminal Justice System | 10.2% |
| Human Services | 7.4% |
2008-2010 Biennium Total Fund Appropriations $53.2 Billion[5]
| Category | Percentage |
| Postsecondary Education | 20.1% |
| Medicaid | 20.0% |
| Education | 18.5% |
| Other | 11.8% |
| Transportation | 8.6% |
| Capital Projects | 8.3% |
| Human Services | 7.9% |
| Criminal Justice System | 4.8% |
2008-2009 budget crisis
Kentucky faced a FY 2009 budget deficit of more than $500 million by the end of the fiscal year on June 30, 2009. Gov. Steve Beshear and the Kentucky Legislature balanced the FY 2009 budget without using State Fiscal Stabilization stimulus dollars. Kentucky's state revenues continue to decline for the first quarter of FY 2010 compared to FY 2009. General Fund collections dropped 9.8% for the month of September 2009 compared to September of 2008 and 5.6% less for the July to September quarter. The FY 2010 budget basis anticipated a revenue decline of 1.5% from FY 2009.[6]
Accounting Principles
The Kentucky Auditor of Public Accounts has been Crit Luallen since her first election in November of 2003. Luallen was named 2009 'Public Official of the Year' by Governing Magazine. Kentucky's audit reports may be searched online. The Reorganization Act of 1936 established the Auditor of Public Accounts as an impartial auditor entirely independent of state administration and charged the office with the responsibility to audit the accounts and financial transactions of all spending agencies of the Commonwealth. This remains the primary function of the Auditor of Public Accounts today.
The Institute for Truth in Accounting (IFTA) rates Kentucky “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Kentucky's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[7] Kentucky's CAFRs are published online by the Finance and Administration Cabinet and the Office of the Controller. Jonathan Miller is Secretary of the Finance Administration Cabinet and Edgar C. Ross is Kentucky State Controller.[8]
Accounting transparency checklist
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The good
- The website has Comprehensive Annual Financial Reports (CAFR) dating back to 1998.[9]
- An independent auditor’s report is published on page 12 of the document. [10]
- It provides supplements to the budget workup, such as non-major Governmental funds, starting on page 130 of the document.
- The budget is posted using organized and consistent methods of financial reporting.
- Kentucky law requires a balanced budget.[11]
- It includes all costs incurred by the government, including future liabilities, starting on page 99 of the document.
- The CAFR compares estimated and actual budgetary numbers, such as on page 108 of the document.
The bad
- The Kentucky office was not precisely timely in submitting the budget.
- The CAFR is posted in PDF format, so it’s not searchable online.
The Secretary of Finance provides executive policy and management for the departments and divisions of the Cabinet and serves as the chief financial officer and manager of the financial resources of the Commonwealth. The Kentucky Office of the Controller is responsible for all state accounting policies and procedures, cash management and strategic financial planning. The Controller acts as the commonwealth’s chief accounting officer.[12]
| Credit Rating | Fitch | Moody's | S&P |
| Kentucky[13] | NR | Aa2 | AA- |
Transparency
- See sample transparency legislation at the Sunshine Standard
Economic Stimulus Transparency
- Kentucky will receive approximately $292 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[14]
- Kentucky will receive an estimated $2,090,341,858 [15]
- The economic recovery website to show how legislators and government officials in Kentucky are spending Federal funds is available here.
Error in ARRP
On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.[16][17]
The ARRP tracking website sent money to nine non-existent Districts in Kentucky. According to recovery.gov, Kentucky's 7th District received more than $31 million from the stimulus package, despite being eliminated in the 1990 census.[18]
News
State Rep. Rick Nelson said he intends to file legislation in the coming 2011 legislative session to require all budget meetings to be held openly.[19] In Kentucky, the Legislature is exempt from the state open meetings law.[19]
One Kentucky project was noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. The project spent $357,710 in stimulus funds to makeover the Fitchburg Furnace after a local moonshiner loaded the structure with dynamite and tried to blow it up 50 years ago. In 2004, however, the federal government gave $661,000 for the restoration of the building, though the money was squandered.[20]
Kentucky's comprehensive spending transparency website, called "Kentucky's Open Door,"[21] continues to be updated with new state spending information. Information about state employee salaries, contracts, and grants is now available online.
The site was implemented at the recommendation of a task force[22] created thanks to the executive order[23] of Kentucky's Governor Steven Beshear.
Sign up for Show Me The Spending's weekly transparency e-updates. As transparency news about Kentucky becomes available, it will be sent out by email and posted on this page.
Government tools
- See also: Evaluation of Kentucky state website
Check It Out Kentucky! provides a searchable database of the Secretary of State's financial information, organized by categories such as expenditures and vendors. In addition, the Office of the Treasurer has developed a site, V.I.E.W. (Vendor Income and Expense Watch), that posts information on contract amounts, contractors, and the government agency issuing the fund. Currently, V.I.E.W. contains financial information for only a handful of state agencies, including the Auditor of Public Accounts, the Department of Highways, the Kentucky State Treasury (State Treasurer), and the Office of the Controller.[24] Data from other agencies will be placed online as that data is approved for release. See the official V.I.E.W. website for more details.
Kentucky's Open Door provides spending information including state expenditures on grants, contracts, and public employee salaries. Click here to visit the site.
The following table is helpful in evaluating the level of transparency provided by Check It Out Kentucky!, V.I.E.W., and Kentucky's Open Door:
| State Database | Searchability | Grants | Contracts | Line Item Expenditures | Dept/Agency Budgets | Public Employee Salary |
|---|---|---|---|---|---|---|
| Check It Out Kentucky! |  |
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| V.I.E.W. | |
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| Kentucky's Open Door | |
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Limitations and Suggestions
The individuals who developed www.opendoor.ky.gov realize it's not perfect yet, and they welcome suggestions for improvements. According to the site, "Governor Beshear realizes that Kentucky’s Open Door will not be complete. Nor will it ever be. The site will be ever-evolving and ever-improving; it will be a continuing goal to refine and supplement the site, providing more and more information to Kentucky taxpayers in an easy-to-access format. And we treasure YOUR input."[25]
Suggestions for improvement can be posted under this section, or submitted here.
Independent transparency sites
Visit www.freedomkentucky.org to see an "open, collaborative database of information that seeks to inform Kentucky's citizenry about issues that are important to them. Through making knowledge accessible and easily understood, FreedomKentucky empowers Kentuckians to restore lost freedoms by holding public leaders accountable."[26]
Public employee salary information
- Main article: Kentucky state government salary
Kentucky's Open Door now provides salary information.
The Louisville Courier-Journal provides state employee salary information here.
The Herald Leader provides this database of salaries of state employees, Lexington-Fayette Urban County Government, and the University of Kentucky for the year 2006: Kentucky State Salary Database.
See Also
External links
- Kentucky Budget Process on FreedomKentucky.org
- Kentucky's Open Door
- Bluegrass Institute for Public Policy Solutions
- Check It Out Kentucky!, official website
- V.I.E.W. (Vendor Income and Expense Watch), official website
- Kentucky Secretary of State website
- Office of State Budget Director
- Kentucky Finance and Administration Cabinet, Office of the Controller
- Kentucky Government spending
- Model transparency legislation from the American Legislative Exchange Council is available at this link.
Additional Reading
- Gov. Steve Beshear,"2010 State of the Commonwealth Address," January 6, 2010
- Associated Press,"Bourbon spills to protest Ky. tax hike on booze," February 10,2009
- Stateline.org,"Kentucky State of the Commonwealth Address 2009," February 4,2009
References
- ↑ 1.0 1.1 The Louisville Courier-Journal "Kentucky surplus revised to $29.7 million" July 22, 2010
- ↑ Kentucky's Open Door,"How the budget is made," retrieved February 24, 2009
- ↑ 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 ,"Kentucky state and local spending," retrieved February 24,2009
- ↑ Office of State Budget Director, "2008-2010 Budget in Brief," June 11, 2008
- ↑ Office of State Budget Director, "2008-2010 Budget in Brief," June 11, 2008
- ↑ Courier-Journal, "Kentucky budget problems growing," October 10, 2009
- ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- ↑ Kentucky Finance and Administration Web site, retrieved October 26, 2009
- ↑ Kentucky CAFRs
- ↑ Kentucky CAFR
- ↑ Institute for Truth in Accounting, Kentucky
- ↑ Kentucky Finance and Administration Web site, retrieved October 26, 2009
- ↑ State of Indiana, “State Credit Ratings-as of June 24, 2009"
- ↑ Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
- ↑ Wall Street Journal,"Stimulus Spending by State," March 12,2009
- ↑ $6.4 Billion Stimulus goes to Phantom Districts, Watchdog.org, November 17, 2009
- ↑ Stimulus Creates Jobs in Non-Existent Congressional Districts, Watchdog.org, November 16, 2009
- ↑ Kentucky, Watchdog.org, November 17, 2009
- ↑ 19.0 19.1 Bloomberg "Ky. state lawmaker wants open budget meetings" Dec. 15, 2010
- ↑ "Summertime Blues, 100 stimulus projects that give taxpayers the blues" August 2010
- ↑ e-Transparency Letter from Jonathan Miller, Secretary of Finance and Administration and Chair of the e-Transparency Task Force
- ↑ e-Transparency Task Force Information
- ↑ E-Transparency
- ↑ V.I.E.W. (Vendor Income and Expense Watch) official website
- ↑ www.opendoor.ky.gov About
- ↑ www.freedomkentucky.org home page
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