December 28, 2007 (LPAC)--The "catastrophic" failure of Bush's economic policies, as Lyndon LaRouche put it on Dec. 27 in reference to California's $14.5 billion revenue shortfall, has claimed another victim. Kentucky's Gov. Steve Beshear announced a $434 million revenue shortfall for this fiscal year, and an additional $500 million for the next, at an "emergency" press conference at the Frankfort, Ky. capital yesterday. The state's revenue was expected to grow by 4.5%, but instead revenue `growth' is at less than 1% for this fiscal year, July 2007 to June 30, 2008.

At least 14 other states have announced revenue shortfalls ranging from $250 million to California's whopping $14.5 billion, since November. Gov. Beshear specifically said Kentucky's "budgetary crisis" is a result of "a national economic downturn; subprime mortgage difficulties affecting our housing industry and durable goods manufacturing; and the lowest employment growth in several years." Beshear's budget director Mary Lassiter added it is not "unprecedented" to have a revenue shortfall in December "but the magnitude is unprecedented." Kentucky House Speaker Jody Richards (D) told the Courier Journal he thinks this deficit "is the worst that I can remember. It is a function of the economy."

Beshear specifically pointed to a $389 million shortfall in the state's Medicaid budget, a third of which is paid out of General Fund revenues, as a key factor. A Kentucky state legislator told EIR the deep unemployment, especially among young workers in the far west of the state and Louisville area, have caused increased demands for Medicaid. Since Bush took office in 2001 the state's unemployment rate grew from 5.2%, peaked at 6.3% in 2003, and has hovered between 5.7% and 6% since 2004.