Chuck
January 25th, 2005, 06:25 PM
FRANKFORT -- With state General Fund revenue for fiscal years 2004
through 2006 expected to be $629.6 million greater than was forecast a
year ago, economists say Kentucky's economy is on the rebound.
Dr. Lawrence Lynch, chairman of the Consensus Forecasting Group (CFG)
which tracks Kentucky state government's financial growth, told the
House Appropriations and Revenue Committee today that economic recovery
"has taken place in Kentucky much faster than we had anticipated."
The CFG's revised General Fund revenue forecast released this month
shows that the state's economy has improved significantly over the past
year. According to Lynch, actual revenues for Fiscal Year 2004 were
$142.4 million greater than the CFG forecasted in Jan. 2004. Lynch said
the CFG's recent forecast also indicates that General Fund revenue will
be $279.2 million greater in FY 2005 and $208 million greater in FY 2006
than was forecast a year ago.
Lynch said that while Kentucky's numbers are encouraging, economists
remain concerned about a growing national trade deficit, the cost of the
war in Iraq and the possible need to raise interest rates to control
inflation.
"There will always be upward pressure on interest rates as long as there
is a lot of borrowing going on--borrowing by foreigners and by the
government," said Lynch.
Reps. Jon Draud, R-Edgewood, and Robin Webb, D-Grayson, said Kentucky
needs to look at revising its corporate tax and licensing structure to
boost the state's economy. Lynch told the committee earlier that
corporate income and licensing taxes are difficult to collect because
the tax burden can be shifted to other states.
"They've got a lot of leeway with the tax codes jurisdictionally, and
there is no way to know what they're going to do even if we tweak our
tax laws," said Webb.
through 2006 expected to be $629.6 million greater than was forecast a
year ago, economists say Kentucky's economy is on the rebound.
Dr. Lawrence Lynch, chairman of the Consensus Forecasting Group (CFG)
which tracks Kentucky state government's financial growth, told the
House Appropriations and Revenue Committee today that economic recovery
"has taken place in Kentucky much faster than we had anticipated."
The CFG's revised General Fund revenue forecast released this month
shows that the state's economy has improved significantly over the past
year. According to Lynch, actual revenues for Fiscal Year 2004 were
$142.4 million greater than the CFG forecasted in Jan. 2004. Lynch said
the CFG's recent forecast also indicates that General Fund revenue will
be $279.2 million greater in FY 2005 and $208 million greater in FY 2006
than was forecast a year ago.
Lynch said that while Kentucky's numbers are encouraging, economists
remain concerned about a growing national trade deficit, the cost of the
war in Iraq and the possible need to raise interest rates to control
inflation.
"There will always be upward pressure on interest rates as long as there
is a lot of borrowing going on--borrowing by foreigners and by the
government," said Lynch.
Reps. Jon Draud, R-Edgewood, and Robin Webb, D-Grayson, said Kentucky
needs to look at revising its corporate tax and licensing structure to
boost the state's economy. Lynch told the committee earlier that
corporate income and licensing taxes are difficult to collect because
the tax burden can be shifted to other states.
"They've got a lot of leeway with the tax codes jurisdictionally, and
there is no way to know what they're going to do even if we tweak our
tax laws," said Webb.