Governor Announces Sweeping Budget Cuts

FRANKFORT, Ky. (AP) - Gov. Steve Beshear outlined his plan to
rein in state spending Friday, including restrictions on state
hiring and travel, attrition of state employees and a reduction in
travel expenses.
Beshear said that without the cuts, the state would be short
about $300 million in the current budget that runs through June 30.
"There's going to be pain," Beshear declared at a crowded
Capitol press conference.
Beshear's plan whittled down about $78 million from the more
than $430 million expected shortfall in the current budget year.
The governor said he's also authorizing the state to use about $145
million left over from the previous fiscal year and about $42
million in unbudgeted or excess funds to cover the gap.
The remaining deficit must be dealt with by the legislature,
Beshear said, because it includes new state spending for expenses
such as Medicaid and corrections. The General Assembly begins its
budget session next week.
Still, Beshear says the larger problem looming for lawmakers is
expected money problems in the coming two years. State revenue next
year is expected to fall short of the current spending levels by
about $525 million, Beshear said.
Senate President David Williams, R-Burkesville, said after a
morning briefing with Beshear that he doesn't consider Kentucky's
budget woes a crisis. Rather, he considers the current financial
crunch an opportunity for the state to "tighten its belt,"
Williams said.
"There are always challenges in the budgeting process, but I
don't particularly think that this is a crisis," Williams told
reporters earlier outside Beshear's office. "You know, it's an
opportunity for state government to tighten its belt."
Beshear announced last week the state was facing a $434 million
shortfall. With a carry-over surplus from last year, the state must
make up about $290 million or risk not being able to pay its bills,
Beshear said.
State agencies and public universities were told to suggest ways
of slashing their current budgets by 3 percent, Beshear said.
The university spending cuts this year would amount to about
$34.5 million, according to the Council on Postsecondary Education.
The University of Kentucky, which receives about $335 million in
state funding, is facing the largest single cut of more than $10
Universities were considering a range of options to cope,
including hiring freezes, pay and benefit cuts and a reduction in
travel. They're also considering tuition increases.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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