Gov. Steve Beshear on Monday asked President Obama to declare a major disaster for Kentucky as a result of last week’s snow and ice storm that paralyzed the state and left more than two dozen dead and more than 400,000 without power.
As of Tuesday, as many as 100,000 residents remained without electricity.
Beshear — who estimated that storm expenses have exceeded $45 million — also asked Obama to pick up costs incurred for the use of what he said was an unprecedented number of National Guard men.
So far, 93 out of the state’s 120 counties and 71 cities have declared emergencies, the governor said.
Typically, under a major disaster declaration, the federal government reimburses 75% of local and state government expenditures on a range of items, including overtime for workers, debris-removal equipment, and the purchase of generators.
Beshear is asking Washington to pick up 100% of the costs for state and local government expenses incurred during the first seven days of the storm. After that time, the reimbursement rate would be 75% for the federal government and 25% for state and local governments.
On top of the storm problems, acting state budget director John Hicks last Friday released a quarterly economic report that said general fund revenues are now projected to fall $459 million below what’s budgeted for fiscal 2009, which ends June 30. Hicks also said that the road fund is projected to experience a deficit of $119.2 million.
“For most of calendar year 2008, including the first half of FY 09, Kentucky’s economy held up better than many of the neighboring states,” Hicks’ report said. “Kentucky’s rich coal reserves prospered due to higher energy prices, and goods-producing industries fared well with a weak U.S. dollar spurring exports.”
“By years end, the lion had turned into a lamb,” the report concluded. “Energy prices subsided, the dollar appreciated, and durable-goods production languished. That trend is expected to intensify over the next three quarters.”
The Legislature is in session working on cutting the budget. Like in other states, lawmakers are hoping the federal stimulus package before Congress brings relief, and they are considering hikes in “sin taxes” in addition to spending cuts to balance the budget.