FRANKFORT, Ky. — After the state's projected budget shortfall grew by more than half on Friday to $456.1 million, Gov. Steve Beshear warned that the blooming financial crisis may bring tax increases, layoffs and cuts to education and social services programs.
Beshear made his somber remarks shortly after a group of independent economists raised the state's projected revenue shortfall for the state's General Fund from $294 million to $456.1 million. That represents about a 5.1 percent decline in the $8.9 billion of revenue that was expected.
The Democratic governor said a special legislative session is likely in January to deal with the shortfall for this fiscal year, which ends June 30.
However, Republican Senate President David Williams of Burkesville said no special lawmaking session is needed and challenged Beshear's authority to address the crisis.
State law appears to give a governor the power to reduce expenses only when a shortfall is 5 percent or more of expected revenue.
Read the full story at Kentucky.com.