The cliff

The Advocacy Task Force of the Chamber of Commerce met today and one of the topics was the 2010 Kentucky General Assembly that begins in January. It will be the even-numbered year long session which means it's budget time. Law makers will craft a new two-year state spending plan, which in recent years has been difficult to reach.

This summer, the legislature came back into special session to plug the estimated $1 billion shortfall from the economic downturn that was staring the state in the face for the year that started July 1st. Thanks to $742 million in federal stimulus dollars, the hole was relatively easy to plug, and law makers even decided to take in less revenue by exempting military personnel from the state income tax.

Increasingly, though, I hear people talk about "the cliff." For years, legislators have been able to cobble together dimes and quarters from a wide array of state revenue pots, rainy day funds and other places to make end's meet. The stimulus dollars were "the solve" this year, but though we're hearing about economic recovery, the state's income continues to underperform. "The cliff" is the time Frankfort observers see as the day fast approaching when the cupboard is bare but the bills still need to be paid. "The cliff" was a topic today in an interim budget committee hearing. Read the C-J story here: http://tinyurl.com/nzlaw3

Which leads us back to the 2010 legislative session. Certainly, there will be those calling for raising taxes. I suspect the GOP-led Senate will decide a renewed "no tax increase" zest is their best route, particularly with Democrats having picked up two seats this year in special elections in that chamber. Just how tall is that cliff?