Governor calls for additional budget cuts

FRANKFORT, Ky. (AP) - State officials warned Friday that most
state agencies could face additional 6 percent budget cuts to help
offset a projected $161 million revenue shortfall.
Kerri Richardson, spokeswoman for Gov. Steve Beshear, said the
administration is now gathering information on the potential
impacts of the budget cuts.
State Budget Director Mary Lassiter sent letters to the heads of
most government agencies Friday alerting them to potential
reductions in funding.
Richardson said the Medicaid program would be shielded from any
additional cuts. Public schools, state unversities, community
colleges, and the teacher retirement system also are among a short
list of agencies and programs that would be spared.
"These are extraordinarily challenging times," Richardson
said. "We will get final revenue numbers in mid-December, but we
think it is prudent to start planning for cutbacks now."
A panel of state economists predicted last month that the
recession would likely cause additional financial woes for state
government. That was bad news in a state that has already slashed
its budget by some $800 million.
Federal stimulus money has been applied to the state budget to
help stave off some budget cuts.
General fund receipts dropped 4 percent in October, prompting
Lassiter to release a statement earlier this week warning that the
administration was "very concerned" that the state wouldn't bring
in enough money to pay for what's been budgeted in the current
fiscal year.
October revenues totaled about $652 million, down by some $27
million in October 2008.
Corporate income tax dropped nearly 82 percent last month, while
individual income tax collections dipped almost 10 percent. Sales
and use tax receipts were down about 4 percent.

(Copyright 2009 by The Associated Press. All Rights Reserved.)