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Gov. Beshear announces budget cuts

Governor Beshear announced that various agencies will see a 3% cut in funds, to make up for a budget shortfall of more than $100 million.

The cuts affect the budget year that ends in June.

Beshear says there will not be any layoffs, and classroom funding, state police, and medicaid will be spared.

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FRANKFORT, Ky. (AP) - Kentuckians will get their state income
tax refunds on time despite financial problems that have forced
cuts in government services, Gov. Steve Beshear said Monday.
Beshear also said during a Capitol press conference that he has
balanced the budget for the remainder of the fiscal year without
laying off state workers.
Most government agencies, with some notable exceptions, will
face cuts of close to 3 percent. Beshear said he managed to spare
education, economic development, health care and public safety.
The state is dealing with a projected $100 million shortfall
despite having already slashed the current budget by some $800
million.
And, as taxpayers prepare to file their income tax returns,
Beshear promised punctual refunds.
"We're not planning to delay income tax refunds that our people
are due," he said. "They need it as much as we do."
Lawmakers are scheduled to convene Tuesday for the start of a
legislative session that will be overshadowed by continuing
financial problems. Kentucky faces a $1.5 billion shortfall over
the next two years, and, with little sentiment for tax increases,
pro-gambling forces are pushing the notion of putting video slot
machines at horse tracks to generate revenue for state coffers.
Laying off some of the state's 34,000 employees remains a
possibility in the coming two years.
Republican Senate President David Williams said Monday that the
only way to effectively reduce the state budget is to cut base
spending, the largest chunk of which goes to personnel costs.
Williams was critical of Beshear's plan to balance the current
budget. That plan includes cutting spending by nearly $50 million
and transferring nearly $34 million from accounts intended for a
variety of services, including cleaning up underground fuel storage
tanks. It also applies $25 million in federal stimulus funds that
the governor had been saving for next year.
"I don't really understand why he's taking this approach,"
Williams said. "But it appears to be stopgap measures at best."
Williams said it appears Beshear is trying to push state
finances to the "brink" in hopes of convincing lawmakers to
approve a proposal to legalize video slots at horse tracks and then
tax the proceeds. It's a proposal Williams has staunchly opposed.
While some political leaders see gambling as a revenue
generator, it remains politically charged in a state with a long
tradition of betting on horse races.
By some estimates, legalizing slots, then taxing the proceeds,
could generate $200 million to $350 million a year.

(Copyright 2010 by The Associated Press. All Rights Reserved.)


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