The Consensus Forecasting Group (CFG) met Friday to review their official revenue estimates for Fiscal Years 2022, 2023, and 2024. Group members include Kentucky’s top economists. Their forecast guides budget proposals as the governor and General Assembly craft the biennial budget in the 2022 session.
CFG agreed to a mix of control and optimistic forecasts to make their General Fund prediction. That gives the state $1.94 billion more in revenue than what legislators included in the budget they enacted in March. Unless the General Assembly agrees to additional expenditures when they return in January, the state will deposit any budget surplus into the Budget Reserve Trust Fund.
The group forecasts more modest General Fund growth in FY 2023, with an increase of 2.1% to total $14.09 billion. FY 2024 should increase by 4.2% in FY 2024 to $14.68 billion.
Office of State Budget Director Deputy Executive Director for Economic Analysis Greg Harkenrider reported the Road Fund grew 0.1% in October and 4.8% in November. Year-to-date, the fund has grown 3.1% ‒ $70 million ‒ over the current budget. Motor fuels tax collection grew 3.5%, and motor vehicle usage increased 3.1% higher than the pandemic-year totals. Economists predict that total to level out as Kentuckians return to pre-pandemic driving habits.
CFG adopted a 50/50 mix between optimistic and control forecasts for the Road Fund. The economists anticipate the fund will end FY 2022 at $1.68 billion – a 2.3% increase – and jump to $1.72 billion in FY 2023. However, they forecast the Road Fund will contract back to $1.68 billion in FY 2024.