FRANKFORT — A giddy Gov. Steve Beshear claimed Friday that news of more than 5 percent yearly growth in revenue for the state's General Fund is "further proof our momentum continues to accelerate."
But the head of a Berea-based nonprofit organization said the state needs more money.
"Given the state's huge pension funding shortfall and the needs all across the state budget that lawmakers will have to address come January, it's not nearly enough," said Jason Bailey, executive director of the Kentucky Center for Economic Policy.
Bailey said Friday's revenue report from the state budget office is "certainly better than the previous year's $91 million shortfall."
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"This year's growth is in part because of a one-time bump in income taxes that's unlikely to be repeated next year. Kentucky won't be able to grow our way out of our budget hole, but only through meaningful tax reform that generates more revenue to move Kentucky forward," he said.
State budget director Jane Driskell reported that General Fund receipts for the fiscal year that ended June 30 exceeded estimates by $165.4 million.
Receipts for the General Fund, which pays for most state programs, have risen, primarily on the strength of income taxes and sales taxes, Driskell said.
Receipts in June rose 4.4 percent from the same month a year ago.
For fiscal year 2015, General Fund receipts totaled $9.9 billion, which is $504.6 million, or 5.3 percent, more than receipts for the previous year.
Fiscal 2011 was the last time the General Fund grew by more than 5 percent, Driskell said.
"We are pleased to see that all the major taxes reflect healthy growth for the year, exceeding budgeted levels," Driskell said.
"This pattern of receipts suggests that the economic recovery was stronger than predicted when the official revenue estimates were made in December 2013."
Driskell said she is confident that fiscal year 2016, which began July 1, will continue with positive momentum.
"We have now closed the books on revenues and will close the books on the expenditure side later this month," she said. "The determination of the budget surplus will be made at that time."
Kentucky's Constitution requires the state budget to be balanced.
The enacted budget directs that any General Fund surplus can be used only to pay necessary government expenses and to make deposits to a reserve fund.
Beshear was elated with the financial figures.
"In January, I told lawmakers that Kentucky was back with a vengeance," he said.
"Over the last seven years," Beshear said, "we have worked through the worst recession of our lifetime to grow Kentucky's economy, and we get more and more good news every day."
Beshear, a Democrat whose term in office ends in December, said the excess revenues are "broad-based, led by growth in individual income and sales taxes, indicating that salaries and jobs are on the rise and consumer confidence is higher.
"Plus, our hard work in economic development efforts is paying off with the growth in business taxes. This level of activity demonstrates that corporations continue to find the commonwealth a favorable destination for business retention, expansion and new business formation."
Beshear acknowledged that the state has "some challenges, and more work to do, but we are seeing positive trends in almost all areas of the economy."
Friday's revenue report, he said, "certainly tells us that our economy continues to grow and, as a state, that we are moving in the right direction."
Beshear didn't comment on the state of the Road Fund, which pays for highway and other transportation programs.
Road Fund revenues for fiscal year 2015 totaled about $1.53 billion, a decrease of 2.2. percent from the previous fiscal year.
Receipts for June fell 9.2 percent.
Total receipts were $33.8 million less than fiscal year 2014 levels as the two largest accounts — motor fuels and motor vehicle use taxes — declined $46.2 million.
The decline in collections is the first since fiscal year 2009.
Driskell said the ending fiscal 2015 balance for the Road Fund will be determined later this month.
House Speaker Greg Stumbo, D-Prestonsburg, said he was "certainly pleased that the projections regarding the recovery are coming true."
He said the Road Fund shortage is "no surprise since the Senate failed to pass the House plan to stop its depletion and provide for better roads in the 2014 session."
Stumbo was referring to reluctance of the Senate in 2014 to freeze the state's gas tax to stabilize the Road Fund.
The legislature signed off on that measure in this year's session.
There was no immediate comment Friday from Senate Republican leadership about the new state revenue report.