Budget director says Gov. Bevin will lay out budget cuts for estimated $155M revenue shortfall soon

10/26/2017 05:09 PM

FRANKFORT — State agencies will soon get a clearer picture of how Gov. Matt Bevin plans to close an estimated $155.6 million shortfall in the current fiscal year, State Budget Director John Chilton told the Interim Joint Committee on Appropriations and Revenue Thursday.

The expected budget gap is based on projections by the Consensus Forecasting Group, which set the revenue estimate during an Oct. 13 meeting.

That amount is lower than the projected $200 million shortfall that the group of economists predicted earlier in the year, prompting Chilton to ask many state agencies to start planning for 17.4 percent budget cuts in order to meet expected revenues and pump $150 million into the state’s Budget Reserve Trust Fund.

Attorney General Andy Beshear has said money for the rainy day fund can’t be appropriated through budget cuts, but Chilton Thursday that the fund can receive dollars through “discretionary decreases in spending.”

Chilton told lawmakers that his office is evaluating budget reduction plans crafted by agencies affected by cuts before Bevin announces an official directive “in the very near future.”

“We’re in the process of analysis,” he said. “We had several areas where we’ve asked for additional information, additional considerations, and we’re close to making a recommendation to the governor for reductions.”

Chilton said the budget reduction plan will allow some agencies to re-evaluate their spending strategies, with some programs needing to be “reduced, perhaps, significantly” while others “might need to be topped up a little bit.”

Some state agencies have bemoaned the impending cuts, and Tim Feeley, the deputy secretary of the Cabinet for Health and Family Services, told a budget review subcommittee earlier Thursday that programs offered by his cabinet would suffer.

His agency, he says, is beginning to operate programs for the neediest and most vulnerable Kentuckians “on what is getting to be a shoestring.”

“It’s easy to say that the government spends too much money and we can save money just by cutting fraud, waste and abuse,” Feeley said during a meeting of the Budget Review Subcommittee on Human Resources.

“That’s been said so many times for so long that there really is not a whole lot of excess fat even though these are very large numbers in our cabinet. We’ve been looking at possible current cuts and cuts for the coming year, and it’s very difficult to do these cuts without cutting services to the commonwealth, and this is in a universe right now where the services are more important than every before, particularly in the area of the opioid crisis.”

Talk of spending cuts and revenue shortfalls also prompted some members of the budget committee to ask Chilton about the prospects for tax reform.

The budget director says tax reform remains a key point on Bevin’s agenda and that action on the issue is expected “very soon after the pension situation is resolved.”

“We have met with the governor on the topic of taxes, and as with many things that he deals with, everything’s on the table,” Chilton said.


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