By Beth Musgrave – email@example.com
FRANKFORT — House leaders are poised to unveil a state budget proposal in coming days that cuts more than 250 political appointees, trims spending on private contractors, tinkers with the state health insurance program and delays some construction projects.
House Speaker Greg Stumbo, D-Prestonsburg, also said the plan will rely on $220 million in not-yet-approved federal support for the Medicaid program.
The proposal, which Stumbo described vaguely for reporters, would eliminate a projected $400 million shortfall in the first year of the two-year state budget. Much of those savings would carry over into the second year of the budget, but lawmakers still must determine how to overcome a remaining $200 million shortfall in the second year.
“We have balanced in the first year, we have some carry forward actually and we are very, very close in the second year,” Stumbo said.
The first year of the budget, which begins July 1, does not include any cuts to the main funding formula for schools or cuts to the state Medicaid program, Stumbo said.
However, it does call for reducing the number of state workers to 2007 levels across the judicial, executive and legislative branches, Stumbo said.
Specifically, Stumbo said there are about 250 non-merit positions — political appointees — that have been added to the executive branch since 2007.
Stumbo said the reductions could likely be accomplished through attrition, but acknowledged that layoffs are possible. “It doesn’t matter how you get there, you just get there,” he said.
Full details of the plan will be made public after it has been presented to the House Democratic caucus, possibly as early as Wednesday or Thursday, Stumbo said.
However, he cautioned that details will not be released until leaders have agreed on a fix for the second year of the budget.
Gov. Steve Beshear had proposed using about $770 million from expanded gambling at racetracks to help plug a more than $1 billion shortfall in the two-year budget. However, House and Senate leaders immediately rejected the proposal, saying it wasn’t politically feasible.
Advocates for the poor and disabled have criticized the House for banking on an enhanced federal match for the state-federal Medicaid program that has not yet passed Congress, but Stumbo and Senate President David Williams have said it’s reasonable to assume that federal lawmakers will extend the spending by six months. The extra federal money is currently scheduled to expire on Dec. 31.
If the second round of stimulus does not pass, the legislature will have to return in January 2011 to put more money back into the health care program, Stumbo said.
Stumbo said he has not spoken with Beshear about the House’s proposal.
“The governor won’t speculate on proposals he has not yet seen,” said Kerri Richardson, a spokeswoman for Beshear. “Once we see the plan to address the entire biennium, we’ll respond then.”
It’s not yet known how much any individual cuts being considered by House leaders would save the state.
In the first year of the budget, the plan would generate savings by delaying some not-yet-specified construction projects and making changes to the state health insurance program.
Stumbo said he believes the state can spend less on its health insurance program without decreasing benefits for state employees.
In the second year of the budget, lawmakers are considering cuts to private contractors who work for the state and additional changes to the health insurance program, Stumbo said.