FRANKFORT, Ky. (AP) — Kentucky’s budget situation appears solid enough to avoid cuts to state agencies or the Road Fund as state revenues bounce back despite the ongoing COVID-19 pandemic, Gov. Andy Beshear said.

The Democratic governor said Wednesday he anticipates being able to balance the state's current fiscal-year budget without further cuts. He pointed to better-than-expected revenue collections and the influx of virus-related federal and state aid as key factors to avoid midyear cuts.

“This is really good news because it means areas like education, health care and public safety will not face cuts that we thought that they would, in a time where the services that they provide are so essential,” Beshear said at a news conference.

The state's budget situation looked grim in the spring when tax collections plummeted as the virus outbreak shuttered many businesses and put hundreds of thousands of Kentuckians out of work. Despite some ongoing restrictions, the economy has started rebounding.

In recent weeks, the state has been hit by its worst surge of COVID-19 cases.

State General Fund revenues in the final three months of the prior fiscal year declined by 4.5% but bounced back to grow by 5.8% in the first three months of the current fiscal year, State Budget Director John Hicks said in a report. The current fiscal year began July 1. Slight growth is expected in individual income and sales tax revenues, the key contributors to General Fund revenues, he said.

The General Fund pays for most state services, including education, health care and public safety.

The turnaround in the fiscal situation also was fueled by billions of dollars in federal government payments to individuals and businesses, Hicks said.

A $2 trillion virus aid bill passed by Congress early in the pandemic delivered more than $13 billion for Kentucky. Senate Majority Leader Mitch McConnell, R-Ky., was a key architect of the package.

Beshear said Wednesday that the additional flexibility allowed in using the federal aid will “help us to fill the hole that otherwise would have been there" in the state budget. That means the state can provide “uninterrupted services in so many important areas," he said.

“That means we don't have to ask higher education, for instance, for what we thought could be up to an 8% budget cut," the governor said. “The same for so many other important areas of state government."

Beshear cautioned that the anticipation that no midyear spending cuts will be needed hinges on a continuation of the current revenue outlook.

The state's Road Fund revenues also bounced back in the first three months of the current fiscal year after a steep decline in the final quarter of the prior year, Hicks said. The outlook is for revenue growth for the rest of this fiscal year, he said.

Meanwhile, Beshear said he anticipates the state finishing the current fiscal year at the end of next June with more than $460 million in the state's “Rainy Day” Fund, its highest total ever.

Passing another state budget will be the top issue for Kentucky lawmakers when they convene in January for a 30-day session. Republicans added to their overwhelming majorities in both the House and Senate in this week's election.

Kentucky lawmakers passed a slimmed-down, one-year state budget earlier this year because of uncertainties caused by the coronavirus. The state usually operates on a two-year budget cycle.