For Immediate Release
November 25, 1997
Contact: Melissa Forsythe at
(502) 564-2611

Governor Patton Outlines Budget Preparations

Frankfort, Ky. - Governor Paul Patton says although the state’s economy is in a ten year growth spurt, there’s little new money for expanding services and developing new programs. The governor, who’s been crunching numbers to prepare a structurally balanced budget for the consideration of the 1998 Kentucky General Assembly, outlined the revenue growth projections and funding needs for the next years to reporters in Frankfort today.

Governor Patton , briefing reporters with Budget Director Dr. Jim Ramsey, said, "While the Consensus Forecasting Group estimates revenue growth of 4.1 percent in 1999, and 5.1 percent in the year 2000, we’re paying for seven taxes that have been cut in the last three years."

The governor said his priorities are to:

Maintain a structurally balanced budget

Increase the Budget Reserve Trust Fund

Provide more money to Postsecondary Education

Provide elementary and secondary education with a funding increase of CPI plus one percent

Provide more funds for Juvenile Justice

Provide cost of living increases, in the aggregate, to the rest of state government

But he pointed out that a 3% minimum base increase to maintain current state services, plus other vital expenditures on areas such as postsecondary education, would create a structurally unbalanced budget by the second year of the next biennium budget. "Some of our agencies have also told us that a 3% base increase won’t be enough to continue to maintain the services we now provide," Patton said.

Governor Patton said, "Our total resources for fiscal year 1998 are projected to be $6.303 billion, while our estimated appropriations are $6.068 billion. That leaves us with a projected surplus of one time only cash in the amount of $235 million."

The governor said he wants to place $50 million of the 1998 projected surplus in the budget reserve trust fund. "We can’t expect Kentucky’s strong economic growth to continue indefinitely and we must set aside money to prepare for the inevitable slowdown," the governor said.

He also proposed investing $75 million to complete funding for his administration’s Empower Kentucky initiative, designed to streamline costs and efficiency in state government, generating hundreds of millions of dollars in savings.

That would leave $108 million in surplus cash for capital construction projects, based on current projections. Governor Patton said he will work with legislators to compile a list of projects by January to be recommended for surplus funding.

"While Kentucky’s on solid ground financially, our budget analysis shows we must make the most of limited resources," Governor Patton said.

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