Kentucky’s Budget Reserve Trust Fund could have covered nearly 61 days of Fiscal Year 2021 expenditures, according to new research by the Pew Charitable Trusts. That total ranks the commonwealth 10th among the nation’s 50 states.
Kentucky led all states by adding 51 days’ worth of operating costs during FY 2021. According to the report, a total of 23 states hit record highs. Kentucky now has almost twice the national 50-state median of 34.4 days of operating costs.
“Make no mistake, all signs point to a recession, and inflation is already driving up the cost on everything from gas to groceries. While we know we’ll have to face some difficult times, we can weather this if we continue to make the right choices and have the right leadership,” said House Speaker David Osborne (R-Prospect).
Pew reported that legislators added $1.6 billion to reserve funds during the FY 2021 budget cycle. Recent budget bills included another $608.6 million in FY 2022 and $250 million in FY 2023, although the state can transfer money in or out of the fund throughout the year.
Osborne stressed that boosting the rainy-day fund helps position the state for projects and other opportunities that can lead to economic growth.
“For decades we’ve talked about the rainy-day fund and relied on it to make ends meet. We’re never going to get anywhere if we don’t change our mindset and look at the Budget Reserve Trust Fund as a way to invest in Kentucky,” Osborne said. “A healthy Budget Reserve Trust Fund helps our credit rating and makes us competitive for megaprojects like the Ford and SK Innovations BlueOval Electric Battery Plant in Hardin County.”
Osborne also recognized House Appropriations and Revenue Chair Rep. Jason Petrie (R-Elkton) and Vice Chair Rep. Brandon Reed (R-Hodgenville) for “crafting a budget that meets our state’s needs without spending every dollar we had available.”