Thursday, July 14, 2011

Budget surplus!? Think again

The Beshear administration is touting a budget surplus for this fiscal year and claims that roughly $100 million will be deposited into the rainy day fund.

This is a bit misleading, no? When a state has billions of dollars in unfunded liabilities in public pensions and has to borrow $97 million from a future year's Medicaid budget to plug a hole in the current year's, an extra $100 million does not count as a "surplus".

Until the pension system is fully funded and Medicaid (which is currently on an unsustainable path) is on solid ground, claiming a surplus seems a bit premature.

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