Analysis: The slashed, the preserved and the expanded of Beshear's budget proposal

01/17/2012 06:54 PM

The third two-year budget of Gov. Steve Beshear’s tenure as Kentucky’s executive makes the deepest cuts yet in some agencies while simultaneously bolstering state funding for a select few areas of greatest need.

Social workers, drug treatment, early childhood education and certain building projects got extra money, while the governor called for holding the line on K-12 education funding, the prison system and Medicaid and behavioral health programs.

Other agencies weren’t spared in the $19.2 billion two-year budget proposal. Beshear warned Kentuckians and the audience of lawmakers in the House chambers on Tuesday night that the plan wasn’t pretty.

“The day of reckoning has come because with this budget, we begin to carve into some of our most critical services,” Beshear said.

So, let’s start with the services facing the knife, in this case 8.4 percent cuts from their current levels to Fiscal Year 2013, which begins in July.

*The slashed *

  • The offices of the governor, attorney general, state auditor, secretary of state and treasurer
  • The agriculture department with its $29 million budget that covers regulatory functions and Kentucky food marketing
  • The Economic Development Cabinet
  • Energy and Environment Departments — with the exception of mine safety
  • Administration budget of the Health and Family Services Cabinet and Council on Postsecondary Education
  • The Finance and Labor cabinets
  • And the legislative branch

Beshear offered little in the way of specifics about the effects on these agencies facing those cuts.

“The impact of additional cuts will include things like delays in service, loss of federal funds, possible facility closures and even possible layoffs,” he said. However, it is up to those agencies to decide how to implement the reductions.

These cuts are on top of between 25-30 percent collective cuts that many of them have endured over the past few years.

  • Meanwhile, the eight public universities and Kentucky Community and Technical College System will face a 6.4 percent cut under the governor’s plan — putting them below 2001-levels of state funding.
  • Other education-related departments face a 4.2 percent reduction in the next fiscal year, including: Kentucky Educational Television (which aired the governor’s budget address), the Kentucky Department of Libraries, office for the blind, the commission on deaf and hard of hearing and the office for workforce and training.
  • The Kentucky State Police, state prosecutors and the department of juvenile justice would face 2.2 percent cuts.

The expanded

But Beshear did make targeted increases in state funding to bolster state services in areas under mounting pressure, most notably with social workers and drug abuse treatment.

Among those “priorities” that will see more money:

  • Social workers — $20.7 million extra over two years to hire more social workers to reduce caseloads from 20 cases per employee to 18. That would mean $10.8 million in FY 2013 and $9.9 million in FY 2014.

  • Early childhood education — $15 million a year more to expand state funded preschool to 4-year-olds whose families earn 160 percent of the poverty line. That would raise it from the current threshold of 150 percent of the poverty line and add 4,430 more children.

“By the end of my term, I intend to make preschool available to all 4-year-olds in families whose income is 200 percent of the poverty level,” Beshear said. “This will help us to reach 3,920 addition children.”

He said in the longterm, that could mean a return on investment of as much as $17 per pupil.

  • Drug treatment — $7.8 million over two years for Medicaid to fund out-patient substance abuse treatment. That would allow for 4,500 people to get treated through the program in FY 2013 and another 1,300 in FY 2014.
  • U. of Pikeville — Beshear left money from the multi-county coal severance tax fund unallocated so it could potentially be used for the University of Pikeville to become the ninth state-funded four-year university. This has been a priority of House Speaker Greg Stumbo, who filed the legislation to do that on Tuesday.
  • Colon cancer screening — $1 million over two years for colon cancer screening for as many as 4,000 uninsured Kentuckians. Kentucky leads the nation in instances of colon cancer.

“While this type of cancer can be costly to treat, it is highly preventable with screening,” he said.

The preserved

And several cornerstones Beshear has advocated to protect in the past were preserved with flat-line funding, under the governor’s plan:

  • Schools — The SEEK funding formula that goes to K-12 schools and makes up 43.7 percent of the $19.2 billion in state spending over two years.

“I have protected SEEK through 10 rounds of budget cuts, and I’m not about to stop now,” Beshear told legislators. “But folks, maintaining funding is not a step forward.”

With an unexpected increase in pupils in public schools this year, districts are looking at 2008-level funding in FY 2013. But Beshear said if any budget surplus emerges, that money would go to schools.

  • Medicaid — The program that covers more than 800,000 poor and disabled Kentuckians won’t face any cuts. Neither will the department of behavioral health.
  • Prisons — The Department of Corrections will be spared cuts. And the department will continue to phase out contracts with private prison firms, Beshear said.
  • Public defenders — The department of public advocacy is shielded from cuts “given the sheer number of indigent clients they serve,” Beshear said.
  • State employee retirement and health insurance — The state will continue putting in the required amount for the public employee and teacher’s retirement funds.

But, as Beshear noted, it is a mixed bag for state workers. No raises for the forth year in a row and they will likely have to pay more next year for health insurance as those costs continue to go up.

The legislature, starting with the House, now gets a crack at the budget.

“We could — and we should — be doing more,” Beshear told those lawmakers at the end of the speech.

- Video produced by Nick Storm

(Clarification: An earlier draft was unclear about what the governor’s proposal did to leave money available for use for the University of Pikeville to become a public university.)


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