FRANKFORT, Ky. (AP) - Gov. Steve Beshear warned Monday that Kentucky faces tough financial times ahead but offered words of optimism that the state may be strengthened by the hardship.
In his first State of the Commonwealth address, Beshear lamented a "budget crisis" that he said will "reduce our ability to make major new investments in some important priorities." The speech mirrored others he has given since taking office last month.
"It is my duty and my responsibility to inform you that we have some tough times ahead," he said. "The revenue outlook is grim. Because of the economic slowdown, the cooling of the housing market, oil prices and a gap between what we spend and what we earn, we are facing an unprecedented budgetary shortfall."
Beshear, who received a standing ovation when he arrived to speak to a joint session of the House and Senate shortly after 7 p.m. EST, said raising taxes will be a last resort. And he made no mention of his proposal to legalize casinos in the state, a move that the Democratic governor says could generate $500 million a year in additional revenue for state government.
"So that leaves cutting government spending," Beshear said. "We can bring more efficiency out of state government, and I intend to do just that."
Though necessary, Beshear said spending cuts will require painful sacrifices.
"I would much prefer to be standing here today talking to you about all the new investments we're making, but much of that will have to wait for another day," he said.
Beshear, who defeated former Gov. Ernie Fletcher in November, brushed on some of his campaign promises in the speech, many of which came with a hefty price tag. He said Monday he remains "fully committed" to helping senior citizens with prescription drug costs, offering more college financial aid, improving the state's public schools, shoring up the state's financially troubled employee retirement system and creating more jobs for Kentuckians. The budget crisis, he said, has hampered his ability to make major investments in his priorities.
"It is not a time for whining or 'woe is us,"' he said. "It is a time for leadership, bold action and temporary cost cutting."
Some lawmakers were surprised that Beshear didn't mention casinos in the speech.
"I wouldn't think that he would have given up on the idea," said Senate President David Williams, R-Burkesville. "It's rather strange. It was kind of the big elephant in the room that nobody mentioned tonight, you know, so I don't really know an explanation to that."
Beshear had made a proposal to open casinos in Kentucky a centerpiece of his election campaign. He wants lawmakers to put a referendum on the ballot so that Kentucky voters can decide whether to amend the state constitution to legalize casinos.
House Speaker Jody Richards, D-Bowling Green, said he expects Beshear to raise the casino issue when he delivers his budget proposals to lawmakers later this month.
The state's financial problems have a bright side, Beshear said. "It is an opportunity to make every state agency leaner, more efficient and more responsive."
Beshear said he wants to restore people's trust in state government, and he reminded lawmakers that he is proposing ethics reforms, one of which would revamp the Executive Branch Ethics Commission.
"I am hopeful that these measures will restore some of that trust in government, which is so critical to our success," he said.
Beshear also called on lawmakers to cooperate in finding solutions to the state's problems. He urged them to avoid political bickering.
"This crisis can indeed be a positive turning point for Kentucky," he said.
Richards said Beshear has grappled with financial woes from the moment he took office, but was able to be optimistic despite those problems.
"So, I felt very good about the speech," Richards said. "I thought it was uplifting and was really good and set a good tone."
---Associated Press writer Joe Biesk contributed to this report.
(Copyright 2008 by The Associated Press. All Rights Reserved.)