More 2% cuts to certain agencies needed to KY balance budget, official tells lawmakers

11/29/2011 03:10 PM

FRANKFORT — Gov. Steve Beshear’s administration is implementing another round of 2 percent cuts to many state agencies to help cover a $189.9 million budget gap in the current fiscal year.

Mary Lassiter, Beshear’s budget director, told lawmakers Tuesday afternoon that the latest round of cuts would come on top of recurring 1.5 percent cuts to the agencies.

“We will balance our budget,” Lassiter said.

Agencies were first warned of the cuts in May, Lassiter said. She said after the meeting that the cuts have increased the burden on the remaining employees in those departments.

But key areas would be except from the cuts, including:

  • The SEEK formula for schools
  • The Medicaid program covering health care for more than 800,000 poor and disabled
  • The Corrections Department
  • Prosecutors and public advocates
  • Public universities and financial aid
  • Behavioral health programs
  • Juvenile justice
  • Executive Branch Ethics Commission
  • Board of Elections
  • The Kentucky Horse Park Commission

Lassiter told the joint committee of appropriations and revenue that the administration wants to use $75.5 million from the more than $100 million in Kentucky’s rainy day fund.

The additional $114 million to cover the rest of the gap would come from spending reductions:

  • $27.5 million from reductions of appointed government personnel and 1.5 percent cuts
  • $57.9 million in savings from debt payments
  • $29 million from the new round of 2 percent cuts

Unlike last year, rank-and-file state employees won’t be forced to take unpaid furlough days, Lassiter said.

That $189.9 million gap was initially expected to be covered — at least partially — through savings realized by companies hired by the state to take over the management of some functions in Medicaid.

Some lawmakers, including Senate budget chairman Bob Leeper, asked Lassiter for more information about the proposed cuts.


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