The Consensus Forecasting Group may not be widely known outside of the state Capitol, but these economists nonetheless have an important role to play, since they’re the ones who determine how much revenue state government can expect.
On the Friday before the Memorial Day weekend, the group came together to review just how much has changed since the coronavirus began upending the world’s economy three-plus months ago.
Their estimates confirmed the sudden drop in state revenues is unlike anything seen since the Great Depression. The revenues had grown around four percent through March – three-fourths of the way through the fiscal year – but are now more than $450 million in the red. When annualized over a year, that’s a four percent decline.
The Road Fund has taken an even bigger hit. It showed 2.2 percent growth through the fiscal year’s first nine months but now will finish the year 10.4 percent below what was projected.
Under state law, the General Assembly is supposed to be called back into a special session when revenues dip below five percent, and Governor Andy Beshear has promised to do that this month so we can tackle the steep decline in the Road Fund. It’s unlikely we will address general state spending, because the one-year budget enacted in April already gives the governor several options to make up the difference.
It will take some time, and either a vaccine or cure, before life is back to where it was less than four months ago. The hope, though, is that the worst is behind us and that, with the proper precautions, we can get the economy back on its feet and keep the coronavirus largely at bay.
If there is any way I can be of help, please don’t hesitate to reach out. You can email me at [email protected], while the toll-free message line, which is open during normal business hours, is 1-800-372-7181.
I want to thank everyone who has done so much to help one another. That cooperative spirit is the strong foundation we’ll need as we prepare for better days ahead.
