CFC Chairman Frank O’Connor, an economics professor at Eastern Kentucky University, said the economy is producing “just moderate economic growth, it’s not robust.”
But he also said during the panel’s discussions the political situation in Washington has calmed down which leaves him more comfortable with the projections.
The road fund is expected to fall to $1.54 billion next year, a 2.3 percent decrease, and then grow slightly to $1.55 billion in 2016.
There was also more bad news about the coal economy. The General Fund will likely receive $5 million less in coal severance taxes based on plans to close Kentucky Power Company’s Big Sandy generating plant’s coal-fired units. The plant will replace that power with power generated in a West Virginia facility it is purchasing half interest in and eventually converting one Big Sandy unit to natural gas.
Dr. Thomas Jones of the Governor’s Office of Economic Analysis said coal producers who have previously supplied Big Sandy with coal have been unable in a depressed coal economy to replace those sales through contracts with other buyers.
He said he’d spoken with owners of nine eastern Kentucky coal mines, five of which supply Big Sandy, and all of which are likely to close down by the end of fiscal year 2014.
Lottery revenues would have remained more or less static had the Lottery Board not decided to offer a new Keno game. That’s expected to raise lottery revenues to $237 million next year, an increase of about $13 million. That will grow another $12 million in 2016.