Beshear orders 2 percent cuts in most state agencies to balance budget

November 29, 2011 | | Comments 0

By Jack Brammer

FRANKFORT – Gov. Steve Beshear has ordered most state agencies to cut their spending by 2 percent to help balance the state budget for this fiscal year that ends next June 30.

State budget director Mary Lassiter told lawmakers Tuesday that the various agencies will have to evaluate whether to initiate any layoffs to arrive at the cuts.

“If there are any, it will be very minimal,” she said.

No furloughs of state employees are planned, she added.

The 2 percent cuts will not apply to several agencies, including basic school funding, Medicaid, community based services like social workers, corrections, universities and student financial aid.

The state legislature had mandated Beshear to make $189.9 million worth of cuts in this year’s budget.

Lassiter said that mandate will be met by cutting spending by $114.4 million and using $75.5 million in estimated excess revenues from this year.

She outlined to members of the Interim Joint Committee on Appropriations and Revenue where the $114.4 million worth of cuts will occur.

The additional 2 percent budget cuts will save $29 million, she said.

Another $57.9 million, she said, will come from money that originally was appropriated to meet debt service on building projects but will not be needed.

Reasons for this, she said, range from projects not being ready to be bonded to cheaper interest rates.

And $27.5 million, she said, will come from recurring savings from 1.5 percent worth of cuts last fiscal year and reductions in the number of non-merit, or politically appointed positions. Lassiter did not have an immediate number for non-merit reductions.

Filed Under: KY General AssemblyState BudgetState GovernmentSteve Beshear

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