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Beshear says cuts won’t come until mid-July

June 29, 2009 | | Comments 0

FRANKFORT — A new fiscal year begins Wednesday but state agencies won’ t know until mid-July how deep they must cut their budgets to balance the budget, Gov. Steve Beshear said Monday.

Gov. Steve Beshear

Gov. Steve Beshear

Beshear met with cabinet secretaries Monday afternoon to discuss the special legislative session that concluded last week.

The General Assembly passed a budget fix that included using $741 million in federal stimulus dollars and several cost-cutting measures to address a projected $996 million shortfall. But the legislature also added tax incentives to an omnibus economic incentive package. Those tax breaks — including an income tax exemption for all active-duty military personnel — will translate to deeper-than-expected cuts for many state agencies.

The General Assembly also added about $22 million in new spending that Beshear’s proposal did not call for, Beshear said.

Beshear said Monday at a Capitol news conference that the state is still waiting to tabulate tax receipts for the current fiscal year, which ends Tuesday. That means a final estimate will likely not be available until mid-July.

Beshear originally proposed a 2.6 percent cut to most state agencies with the exception of some select programs, such as Medicaid, the main funding formula for K-12 and post-secondary education.

Beshear said Monday that Medicaid, K-12 and post-secondary education will not be asked to cut their budgets to make up for the additional revenue lost to the tax incentives.

Beshear also declined Monday to say whether he would seek re-election in 2011 or when he would make that announcement. “I’ll be talking about that in due course,” Beshear said.

— Beth Musgrave

Filed Under: FeaturedState BudgetState GovernmentSteve Beshear

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