Kentucky Auditor candidate John Kemper pointed out something odd about the record-high deposit to the state's rainy day fund a month ago: it's illegal.
"Kentucky state law prohibits putting more than half of an annual surplus into the budget reserve trust fund, also known as the rainy day fund," Kemper said. "A change in the law in 2010 allows the governor to spend all the rainy day money without the General Assembly's permission for the rest of this fiscal year. Our legislators are going to have to be more careful controlling spending in the next budget."
Budget officials in Frankfort said this morning that the legislature changed the law in the 2010 special session to allow Beshear to put more than half of the $156.8 million "surplus" into the rainy day fund. But HB 1 didn't notwithstand KRS 48.705. Instead, it temporarily rescinded KRS 48.700.
We will never know for sure who mixed up the numbers of the two statutes, but by notwithstanding KRS 48.700, the legislature allows Beshear to spend all of the $121 million in the rainy day fund without the permission of the General Assembly.
Giving Beshear control over that much money is not a great idea and something at least some members of the legislature claim to oppose doing. If Beshear misappropriates any part of that money, we should call it the Kentucky typo tax.