H-L takes Fletcher to task for $1 Billion budget claim.
The Herald Leader's John Stamper has written a piece, Fletcher off $700 Million on budget deficit claim, which takes Fletcher to task for claiming that he erased a $1 Billion deficit. Here are excerpts from John's piece:
Facing a tough primary election, Gov. Ernie Fletcher has spent big money in recent months touting his accomplishments as the state's chief executive.
One of his favorite lines leads a new TV ad that began running statewide Wednesday night. "We were facing a billion-dollar deficit" when Fletcher took office, says a deep-voiced man as ominous music plays in the background.
Not exactly. He's off by about $700 million.
Here's what actually happened.
Days after Fletcher took office in December 2003, a revenue shortfall for fiscal year 2004 of $262 million was projected by the state's Consensus Forecasting Group. The state also had to make up about $41 million in unexpected expenditures, bringing the total projected budget shortfall to $303 million.
Knowing that state law requires a balanced budget, Fletcher pulled $86.4 million from a variety of restricted and emergency funds, ordered state agencies to reduce spending by $147.4 million, and received $68.7 million of relief from the federal government.
He also ordered additional cuts in the state's operating budget, which provided $110 million more to be used in the next two-year budget.
In the end, some of those actions weren't necessary. The economy began picking up in the spring of 2004, and the state wound up collecting $132.4 million more than had been forecast in December. By the end of the following fiscal year, the state had a $214 million General Fund surplus.
"There was never a billion-dollar deficit," says State Auditor Crit Luallen, the former executive secretary of Gov. Paul Patton's cabinet. "There was a balanced budget. That's what the constitution requires."
Still, Fletcher repeatedly claims in speeches, mailers and TV ads that he erased a $1 billion deficit.
Budget Director Brad Cowgill says the additional $700 million cited by Fletcher is a budget shortfall for fiscal year 2005 that Patton predicted in a November 2003 report.
Fletcher clings to the report, even though Patton's prediction was wrong and the state's Consensus Forecasting Group never predicted a budget shortfall in fiscal year 2005.
"I didn't know the economy was going to take off like a rocket," Patton said yesterday, explaining his erroneous prediction.
Even if it they had been correct, Patton says, it's unfair to characterize the numbers in his report as a deficit. He was only trying to tell policy-makers that they needed to find new revenue if they expected to increase funding for things such as teacher pay, health care and prisons.
Some of the needs outlined in the report still haven't been met, he said.
...
"This report is built on the belief, presumably genuine, that it was beyond the capacity of government to achieve levels of efficiency beyond what were already achieved," Cowgill said. "Gov. Fletcher had a different view of things."
Still, he acknowledges that critics today might be able to produce a report similar to Patton's that predicts a budget shortfall in the upcoming biennium, based on the state's obligation to pay for rising health insurance costs, fund an ailing pension system, increase teacher pay and reduce the budget's structural imbalance.
Critics also contend that Fletcher did raise taxes, although Fletcher's new TV ad ends by saying "Ernie Fletcher brought us that surplus while lowering taxes for most everyone."
To support its claim, the campaign points to a tax-code overhaul pushed by Fletcher in the 2005 General Assembly. However, when the bill passed, Fletcher described it as a "revenue-neutral" change.
So I ask you, who has the budget claim right?
Update: Below is a press release from Fletcher's office in response to the H-L piece:
FRANKFORT, Ky. – Governor Fletcher today outlined the basis for his repeated statement that, at the time he was inaugurated he faced a billion dollar deficit.
"The public record clearly shows that I inherited a $303 million dollar budget shortfall in the first year and that the government itself was projecting a shortfall of $710 million for the following year," said Governor Fletcher. "To bring both years into balance, I had to act immediately to make government work more efficiently and to stimulate the state’s economy.
The Governor stated that his references to a billion dollar deficit are "absolutely authentic" based on the public records from his first months in office. "I have not heard any better way of quantifying the financial crisis which we faced during our first 18 months," said Governor Fletcher.
The Governor stated that he was pleased with Governor Patton’s recent acknowledgement (sic) that the Kentucky economy "took off like a rocket." For his part, Governor Fletcher stated that the list of needs outlined in the Patton Administration’s report ("Kentucky’s Fiscal Crisis") is reasonable.
"Looking back, it’s easy to say that the revenue forecasts behind the projected $710 million deficit were simply wrong or that the government underestimated its own ability to work more efficiently," said Governor Fletcher.
"But I was the one who staked my political career on our ability to bring back our economy, create new jobs, run government more efficiently and avoid the tax increases being advocated. I was the one who had to make the hard decisions on spending cuts."
At the time of his inauguration, the state’s rainy day fund was virtually depleted. At the end of his first 18 months in office, Governor Fletcher posted a $214 million General Fund surplus, one of the largest in the state’s history.
Governor Fletcher cited his Medicaid reform, his decision to self-fund the state’s health insurance plan, his reduction in the number of cabinets and a reduction in the size of the state’s employment base as examples of the efficiencies his administration has achieved.
And below is a press release from his campaign:
Anne Northup sent out an e-mail yesterday parroting the liberal Lexington Herald Leader in its attack on Governor Fletcher. Apparently, since the Northup Campaign has nothing positive to say about Mrs. Northup and is void of ideas that will move Kentucky forward, they continue to lash out at Governor Fletcher.
Our most recent ad says that Governor Fletcher was facing a billion dollar deficit. That is an absolute fact.
Just two days prior to Governor Fletcher’s election, outgoing Governor Paul Patton issued a report titled "Kentucky’s Fiscal Crisis". On page nine of that report he projected a shortfall of $710 million for 2005 and a shortfall of $754 million for 2006. In fact, when you add in the $300 million dollar shortfall for 2004 the number is closer to $2 billion.
A shortfall becomes a deficit when it is not addressed. Governor Fletcher addressed the issue and solved the problem. Regardless of how the Lexington Herald Leader, and their new mouthpiece Anne Northup, try to spin it, when Governor Fletcher took office he was facing over a billion dollar deficit.
The fact that Governor Fletcher took action and solved the problem preventing the deficit from becoming a reality does not change the fact that he was facing a billion dollar deficit when he took office.
Also in the report Governor Patton said the only solution was "Draconian cuts in the current level of services being provided by our citizens or major increases in taxes." Governor Fletcher took neither of those courses of action and still prevented the shortfall.
Also in our new ad we say that Governor Fletcher did this by lowering taxes on almost everyone. The Anne Northup newsletter, formerly known as the Lexington Herald Leader, asserts that the Governor did not cut taxes. The fact is that Governor Fletcher cut taxes for 78% of working Kentuckians and took nearly 500,000 people off the tax rolls. He also reduced taxes on corporations by 30%. Everywhere in the world outside of the Lexington Herald Leader and Northup campaign offices, 78% is almost everyone.
What think you?
I also forgot to report that Fletcher's campaign has agreed to refund about $20,000.00 to the State Treasury for personal campaign expenses he took while on official state "check presentation" business. The issue was first raised by the H-L's John Stamper and Ryan Alessi and reported here, though at the time Fletcher's campaign mananger stated that the campaign was within its legal rights NOT to refund the money. John Stamper suggests more refunds are due and Northup's campaign accuses Fletcher of caving in because of fear of "political retribution".
Your thoughts on this updated post are also welcomed.
Facing a tough primary election, Gov. Ernie Fletcher has spent big money in recent months touting his accomplishments as the state's chief executive.
One of his favorite lines leads a new TV ad that began running statewide Wednesday night. "We were facing a billion-dollar deficit" when Fletcher took office, says a deep-voiced man as ominous music plays in the background.
Not exactly. He's off by about $700 million.
Here's what actually happened.
Days after Fletcher took office in December 2003, a revenue shortfall for fiscal year 2004 of $262 million was projected by the state's Consensus Forecasting Group. The state also had to make up about $41 million in unexpected expenditures, bringing the total projected budget shortfall to $303 million.
Knowing that state law requires a balanced budget, Fletcher pulled $86.4 million from a variety of restricted and emergency funds, ordered state agencies to reduce spending by $147.4 million, and received $68.7 million of relief from the federal government.
He also ordered additional cuts in the state's operating budget, which provided $110 million more to be used in the next two-year budget.
In the end, some of those actions weren't necessary. The economy began picking up in the spring of 2004, and the state wound up collecting $132.4 million more than had been forecast in December. By the end of the following fiscal year, the state had a $214 million General Fund surplus.
"There was never a billion-dollar deficit," says State Auditor Crit Luallen, the former executive secretary of Gov. Paul Patton's cabinet. "There was a balanced budget. That's what the constitution requires."
Still, Fletcher repeatedly claims in speeches, mailers and TV ads that he erased a $1 billion deficit.
Budget Director Brad Cowgill says the additional $700 million cited by Fletcher is a budget shortfall for fiscal year 2005 that Patton predicted in a November 2003 report.
Fletcher clings to the report, even though Patton's prediction was wrong and the state's Consensus Forecasting Group never predicted a budget shortfall in fiscal year 2005.
"I didn't know the economy was going to take off like a rocket," Patton said yesterday, explaining his erroneous prediction.
Even if it they had been correct, Patton says, it's unfair to characterize the numbers in his report as a deficit. He was only trying to tell policy-makers that they needed to find new revenue if they expected to increase funding for things such as teacher pay, health care and prisons.
Some of the needs outlined in the report still haven't been met, he said.
...
"This report is built on the belief, presumably genuine, that it was beyond the capacity of government to achieve levels of efficiency beyond what were already achieved," Cowgill said. "Gov. Fletcher had a different view of things."
Still, he acknowledges that critics today might be able to produce a report similar to Patton's that predicts a budget shortfall in the upcoming biennium, based on the state's obligation to pay for rising health insurance costs, fund an ailing pension system, increase teacher pay and reduce the budget's structural imbalance.
Critics also contend that Fletcher did raise taxes, although Fletcher's new TV ad ends by saying "Ernie Fletcher brought us that surplus while lowering taxes for most everyone."
To support its claim, the campaign points to a tax-code overhaul pushed by Fletcher in the 2005 General Assembly. However, when the bill passed, Fletcher described it as a "revenue-neutral" change.
So I ask you, who has the budget claim right?
Update: Below is a press release from Fletcher's office in response to the H-L piece:
FRANKFORT, Ky. – Governor Fletcher today outlined the basis for his repeated statement that, at the time he was inaugurated he faced a billion dollar deficit.
"The public record clearly shows that I inherited a $303 million dollar budget shortfall in the first year and that the government itself was projecting a shortfall of $710 million for the following year," said Governor Fletcher. "To bring both years into balance, I had to act immediately to make government work more efficiently and to stimulate the state’s economy.
The Governor stated that his references to a billion dollar deficit are "absolutely authentic" based on the public records from his first months in office. "I have not heard any better way of quantifying the financial crisis which we faced during our first 18 months," said Governor Fletcher.
The Governor stated that he was pleased with Governor Patton’s recent acknowledgement (sic) that the Kentucky economy "took off like a rocket." For his part, Governor Fletcher stated that the list of needs outlined in the Patton Administration’s report ("Kentucky’s Fiscal Crisis") is reasonable.
"Looking back, it’s easy to say that the revenue forecasts behind the projected $710 million deficit were simply wrong or that the government underestimated its own ability to work more efficiently," said Governor Fletcher.
"But I was the one who staked my political career on our ability to bring back our economy, create new jobs, run government more efficiently and avoid the tax increases being advocated. I was the one who had to make the hard decisions on spending cuts."
At the time of his inauguration, the state’s rainy day fund was virtually depleted. At the end of his first 18 months in office, Governor Fletcher posted a $214 million General Fund surplus, one of the largest in the state’s history.
Governor Fletcher cited his Medicaid reform, his decision to self-fund the state’s health insurance plan, his reduction in the number of cabinets and a reduction in the size of the state’s employment base as examples of the efficiencies his administration has achieved.
And below is a press release from his campaign:
Anne Northup sent out an e-mail yesterday parroting the liberal Lexington Herald Leader in its attack on Governor Fletcher. Apparently, since the Northup Campaign has nothing positive to say about Mrs. Northup and is void of ideas that will move Kentucky forward, they continue to lash out at Governor Fletcher.
Our most recent ad says that Governor Fletcher was facing a billion dollar deficit. That is an absolute fact.
Just two days prior to Governor Fletcher’s election, outgoing Governor Paul Patton issued a report titled "Kentucky’s Fiscal Crisis". On page nine of that report he projected a shortfall of $710 million for 2005 and a shortfall of $754 million for 2006. In fact, when you add in the $300 million dollar shortfall for 2004 the number is closer to $2 billion.
A shortfall becomes a deficit when it is not addressed. Governor Fletcher addressed the issue and solved the problem. Regardless of how the Lexington Herald Leader, and their new mouthpiece Anne Northup, try to spin it, when Governor Fletcher took office he was facing over a billion dollar deficit.
The fact that Governor Fletcher took action and solved the problem preventing the deficit from becoming a reality does not change the fact that he was facing a billion dollar deficit when he took office.
Also in the report Governor Patton said the only solution was "Draconian cuts in the current level of services being provided by our citizens or major increases in taxes." Governor Fletcher took neither of those courses of action and still prevented the shortfall.
Also in our new ad we say that Governor Fletcher did this by lowering taxes on almost everyone. The Anne Northup newsletter, formerly known as the Lexington Herald Leader, asserts that the Governor did not cut taxes. The fact is that Governor Fletcher cut taxes for 78% of working Kentuckians and took nearly 500,000 people off the tax rolls. He also reduced taxes on corporations by 30%. Everywhere in the world outside of the Lexington Herald Leader and Northup campaign offices, 78% is almost everyone.
What think you?
I also forgot to report that Fletcher's campaign has agreed to refund about $20,000.00 to the State Treasury for personal campaign expenses he took while on official state "check presentation" business. The issue was first raised by the H-L's John Stamper and Ryan Alessi and reported here, though at the time Fletcher's campaign mananger stated that the campaign was within its legal rights NOT to refund the money. John Stamper suggests more refunds are due and Northup's campaign accuses Fletcher of caving in because of fear of "political retribution".
Your thoughts on this updated post are also welcomed.
Labels: Kentucky politics, Public Service, Republicanism
posted by KYJurisDoctor at 10:37 AM
10 Comments:
Fletcher has the claim right. He said he was facing a billion dolar deficit, and according to Patton's report, that is exactly correct. In fact Patton called it a crisis.
Patton has now actually misstated the facts to the H-L reporter. We will expose that tonight.
CE has an exclusive link to the Patton report. What that report says, and what Patton stated to the paper are inconsistent.
Brian Goettl
Brian, you can share it (and your thoughts) with us here, if you do NOT mind. Thanks.
Fletcher is a lying ass...expose that CE and you will be doing something worthy of a conservative. I don't know who Brian is, but he needs to get a load of reality. Instead of CE you should call it FE, fletchers excuse express...if you truly hold those views.
This is a ridiculous statement by Fletcher. This is tantamount to a homeowner hearing a weather report that says it's going to rain and flood the entire area...so the homeowner brings his belongings inside only to find out later that it didn't rain. The homeowner then takes great pride in saving all of his belongings...even though there was never any threat in the first place...there was merely a forecast of a threat.
It looks like a little boy who got his hand stuck in the cookie jar and discovered by the adults...embarrassed, he tries to shift the blame.
The Herald Leader, Ryan Alessi, etc., were the adults that caught the boy guvner with his hand in the budget numbers and took him to task...and rightly so!
Thank GOD for a free press!
The Herald-Leader has a relentless agenda against making progress in Kentucky. They don't want Fletcher to be able to claim that he has generated revenue simply by running government efficiently because it undercuts their relentless efforts to raise taxes and push immoral gambling. This is something obvious to all central Kentucky conservatives, and I can't fathom how any conservative would parrot them in agreement.
If I'm sitting at a point in time knowing I will have $2000 in expenses in the future but only $1000 in income for that same period, then I expect a $1000 deficit. When you change your budget to fit your income, or you get an unexpected raise in June, it change the outlook you had in December.
That was the landscape in December 2003: a $300 million existing deficit with another $700 million expected in the next year if the status quo remained. Fortunately for Kentucky, Ernie Fletcher changes the status quo, not by raising taxes as Patton and the Herald Leader advocated, have always advocated, and will continue to advocate, but by delivering better value from less government.
He has reduced the number of cabinets from 14 to 9 and reduced the number of state employees by 2000. He inherated an undisputed $300 million deficit, projections of $700 million deficits for each of the next two years, and has since generated over $650 worth of surplus.
Yeah... he reduced the number of cabinet secretaries from 14 to 9 and then gave the 9 a big pay raise...way to go guv...that'll show em.
He most certainly did raise taxes...he raised the alternative minimum tax. That raised my taxes on my small business! I make so little, that I might as well consider my small business a hobby! But I damn sure got taxed. If you are supporting fletcher...you are deluding yourself.
That ust be the Fletchmeister defending his own policies himself,,,I cannot imagine anyone else so foolsh to defend the indefensible.
The 9th Commandment:
Exodus 20:16 which reads "Thou shalt not bear false witness..."
I am always of the school...Forget what they say...WATCH what they do.
I continually watch Fletcher shoot himslf in the foot, while his foot is lodged squarely in his mouth. Looks like he's done it again!
Post a Comment
<< Home