Many agencies will asked to cut their budget by 8.4 percent.
"Thus the impact of additional cuts will include things like delays in service, loss of federal funds, possible facility closures, and possibly even layoffs," said Beshear, D-Kentucky.
Yet Beshear says he wants to protect most of education, including the K-12 classroom.
"I have protected SEEK through 10 rounds of budget cuts, and I will continue to do so," he told a joint session of the General Assembly Tuesday.
The budget does include bonding allocations, such as millions to improve schools and even some for Rupp Arena.
"We are setting aside $1.5 billion (in bonding money) for the planning and redesign of a significant part of that city's downtown including Rupp Arena," he said.
But more borrowing is worrisome for some.
"It's not that they are not worthy, but I don't know that we can afford to take on new debt. We already had our bond rating downgraded by two ratings agencies," said Sen. Damon Thayer, R-Georgetown.
No gaming money is included, but Beshear says he wants tax reform..and a vote for possible expanded gambling as options for revenue measures in future years.
"Kentuckians have made it clear they want to vote the only question is if we listen to them..or ignore them," said Beshear.
The governor said the bright spot in the budget is the road fund and proposes a 6 year plan that includes completing the Newtown Pike project in Lexington..and spends a half billion to replace 240 substandard bridges.
Lexington Mayor Jim Gray was pleased with the governor's decision to set aside money for renovations to Rupp Arena and downtown. In a statement, Gray said, "The governor has endorsed Lexington's downtown as one of the state's biggest economic growth projects, and that's a big step forward. We appreciate his support."
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