FRANKFORT — A task force of independent economists that predicts how much money Kentucky will have to spend on its programs and policies put a storm cloud Friday over the state's revenue picture.
After hearing staff members of the Governor's Office for Economic Analysis discuss a host of economic indicators on Friday, the Consensus Forecasting Group directed them to compile a "pessimistic" forecast for how much money there will be in the state's coffers during the next two years.
The task force will make a preliminary revenue forecast at its Oct. 14 meeting and must complete its official estimate by Dec. 15. It will be used by the governor and state lawmakers to write a two-year budget in the 2012 General Assembly that begins in January.
"The general feeling was sort of pessimistic," said Larry Lynch, chairman of the forecasting group.
Never miss a local story.
Reasons for the gloomy outlook, Lynch said, include stagnant high unemployment and lackluster growth in new housing.
"Manufacturing has helped us a little bit recently in Kentucky, but the outlook is not so good," he said. "Just look at the data coming out. There'll be a sign of hope one day and terrible things the next."
Lynch said he does not see any option that could help the state's and nation's sour economy in the short run, even work by a so-called "super committee" in Congress that is devising a plan to reduce the federal deficit.
A "sensible thing" to do in the long run, Lynch said, is "to fix Social Security." He did not elaborate.
In August, the Consensus Forecasting Group said the state appears to be poised for a $192 million surplus this fiscal year, which ends June 30.
The state finished the past fiscal year in the black, depositing $121 million in Kentucky's rainy-day fund. The main drivers for the increase included individual income taxes, which were up 11.5 percent, and coal severance taxes, which increased 18.1 percent over July 2010 collections.
Lynch said it's hard for him to say whether the panel will revise the amount of surplus expected for this fiscal year.
He said he wants to see September's revenue receipts before he comments on any possible change in the forecast for this year's receipts.