FRANKFORT — Kentucky is saving again.
After more than three years of budget deficits, the state will deposit more than $121 million in its budget reserve trust fund, commonly called the "rainy day" fund. It is the largest one-time deposit into the fund in state history as a result of an end-of-year surplus, according to Gov. Steve Beshear's office.
The state finished the last fiscal year — which ended June 30 — with a surplus of $156.8 million. Some of that surplus — about $35 million — went to pay for emergencies such as storm cleanup in Western Kentucky and other necessary expenses that were not included in the two-year budget. The remaining money — about $121.8 million — will be deposited, Beshear announced Wednesday.
Lawmakers have tapped out the fund during the past three years as the state's revenues plummeted and demand for services jumped. At its peak, in fiscal year 2001, the fund had more than $278 million. All of that money was used to balance the state's books during the 2001 recession. By 2007, the fund had been replenished to $231 million.
Saving money increases the state's standings with credit-rating agencies, which determine how much the state must pay to borrow money.
"The addition of nearly $122 million into the budget reserve trust fund is a strong message to the nation's credit rating agencies," said Mary Lassiter, the state budget director. "The lack of a robust rainy day fund had been a noted concern among rating agencies. This deposit is a clear signal to those agencies that Kentucky is not only rebounding, but is also making prudent fiscal choices."
The state's General Fund receipts ended fiscal year 2011 up about 6.5 percent from fiscal year 2010. Total receipts were $8.7 billion in fiscal year 2011.
The surplus was largely the result of better-than-expected corporate income and coal severance taxes during the past fiscal year. The Consensus Forecasting Group — a group of economists — will meet later this summer to project revenue for the next two years. State officials use those revenue estimates to develop a budget.