Fletcher releases misleading TV ad

From the Lexington Herald-Leader:

Gov. Ernie Fletcher's re-election campaign released a new ad Wednesday night touting his administration's efforts to turn a state budget deficit into a surplus, all while lowering taxes.

The 30-second spot starts by claiming that Kentucky faced a $1 billion deficit when Fletcher took office in 2003. That number is off by about $700 million. Days after Fletcher took office, a revenue shortfall for fiscal year 2004 of $262 million was projected by the state's Consensus Forecasting Group. The state also had to make up about $40 million in unexpected expenditures, bringing the total General Fund shortfall to $303 million.

Knowing that state law requires a balanced budget, Fletcher pulled $86.4 million from a variety of restricted and emergency funds, ordered state agencies to reduce spending by $147.4 million and received $68.7 million of relief funds from the federal government. He also ordered additional cuts in the state’s operating budget, which provided another $110 million to be used in the next two-year budget.

In the end, all those actions weren't necessary. The economy began picking up in the spring of 2004 and the state wound up collecting $132.4 million more than had been forecasted in December. "There was never a billion dollar deficit," said State Auditor Crit Luallen, the former executive secretary of Gov. Paul Patton's cabinet. "There was a balanced budget. That's what the Constitution requires."

Still, Fletcher repeatedly claims in speeches, mailers and TV ads that he erased a $1 billion deficit. Budget Director Brad Cowgill says the additional $700 million is a budget shortfall for fiscal year 2005 that Patton predicted in a November 2003 report. Fletcher clings to the report, even though Patton's prediction was wrong and the state's Consensus Forecasting Group never predicted a budget shortfall in fiscal year 2005. "I didn’t know the economy was going to take off like a rocket," Patton said today.

But even if it had been correct, Patton says it’s unfair to characterize the numbers in his report as a deficit. He was only trying to tell policy makers that they needed to find new revenue if they expected to increase funding for thinks like teacher pay, health care and prisons.

Some of the needs outlined in the report still haven't been met, he said. Cowgill argues that it's fair for Fletcher to take credit for eliminating Patton's projected shortfall because it was the best available information about the state's financial health when Fletcher took office. "It was the benchmark that affected the expectations of the people of Kentucky at the time he was elected," Cowgill said.