FRANKFORT - There are worse things than not having an enacted state budget, Senate Majority Leader Dan Kelly said Tuesday.

        “An out-of-balance budget is worse than no budget,” Mr. Kelly, R-Springfield, said after hearing a sobering analysis of the state's finances. “The real goal is not to just have a budget but to have a balanced budget.”

        Tax revenues declined in the fiscal year that ended June 30 - a first for Kentucky's General Fund. As a result, growth projections for the current year and the following year might have to be revised, a panel of economists told the General Assembly's interim joint Appropriations and Revenue Committee.

        The House and Senate failed to agree on a budget while in session this year, so Gov. Paul Patton is running the state under an improvised spending plan. Mr. Patton has said he will not call the legislature back to Frankfort until a budget deal is struck.

        The interim committee's House co-chairman, Rep. Harry Moberly, said the two chambers need to “move along and do a budget as soon as possible.”

        On a related matter, the committee learned that 30 states have raised cigarette taxes to help balance budgets, including neighboring states Ohio, Indiana, Illinois and Tennessee this month.

        Kentucky's tax rate is second-lowest in the nation and has been politically untouchable: It has been kept at 3 cents per pack for 32 years. Mr. Moberly, D-Richmond, said raising the tax might become politically feasible if the federal government buys out tobacco production quotas.

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