Kentucky budget

LRC Public Information

A new version of the state budget, penned by Kentucky House Democrats, reverses some of Gov. Matt Bevin’s proposed cuts to state spending.

But for the most part, the bill upholds the governor’s proposal for a 9 percent reduction in spending over the next two years and 4.5 percent reduction this year.

The budget passed out of the House Appropriations and Revenue Committee on Tuesday evening.

Notably, the proposal does not include a bond to shore up the state’s ailing pension systems, which has long been a proposal of House Democrats and anathema to Republicans in the Capitol.

The new proposal does alter the central fixture of Bevin’s plan — diverting $500 million from the Public Employees Health Insurance Fund and saving it for the pension systems down the road. Democrats instead proposed skipping the middle man and putting the excess funds directly into the Kentucky Teachers Retirement Systems.

WFPL

Kentucky’s Republican Governor Matt Bevin went viral with a video he made Monday in the Kentucky Capitol building, chastising the Democratic-controlled House of Representatives for not working to pass a budget.

Democratic House and state party leaders have called Bevin’s video misleading.  Bevin was filmed in the empty House chambers saying House Speaker Greg Stumbo has ignored his call to “get serious” about passing a budget.

“It is 11 o’clock on a Monday. There is nobody in here," Bevin pointed out.  "This House – we have less than 19 days left now for this House to be in session together with the Senate and there’s nothing being done.”

House Democrats responded with their own social media posts depicting a busy transportation budget meeting in the Capitol annex.

Kentucky Democratic Party Chair and State Representative Sannie Overly released a statement saying Bevin either, quote “doesn’t know how the process works or he was trying to distort the truth and mislead people."

Lisa Autry

The chief justice of the Kentucky Supreme Court says the state is facing a potential “constitutional crisis” if courts undergo budget cuts proposed by Governor Matt Bevin.

Chief Justice John Minton says that the Judicial Branch will be unable to perform necessary functions under the cuts and would have to shut down for three weeks during this fiscal year.

“We just simply couldn’t make payroll between now and June 30th if we have to give back $9.5 million," Minton explained.

Justice Minton is requesting that the judicial branch be totally exempted from the cuts. Bevin’s budget cuts nearly all state spending by 4.5 percent this year and 9 percent over the next two years.

Minton says the state’s drug court system could be shut down as a result of the cuts. The program allows those convicted of drug crimes to participate in substance abuse programs instead of serving time.

Alix Mattingly

Gov. Matt Bevin’s top budget aide on Monday said spending cuts are necessary to start improving the status of the state’s ailing pension systems.

Under the governor’s proposed budget, most state agencies will be cut by 4.5 percent for the rest of the current fiscal year and 9 percent over the next two fiscal years.

State Budget Director John Chilton told state legislators that the cuts are better than increasing taxes, borrowing money or ignoring the growing financial liability in the state pension systems.

“Are these severe? Yeah,” he said of the proposed cuts. “But the amount of liability that needs to be paid at some point is huge.”

Combined, the pension systems for state employees and teachers are short about $30 billion in the money the state needs to send out checks to current and future retirees.

Thinkstock

There will be more court-appointed attorneys available to represent poor people in court under Gov. Matt Bevin’s proposed budget.

In his proposal, Bevin set aside funds to add 44 lawyers to the Department of Public Advocacy’s ranks of 333 public defenders.

Ed Monahan, the state’s chief public defender, said the move would help the agency reduce caseloads for its overworked advocates.

“We’re very fortunate that this governor has recognized that if we had additional capacity, that it would not only deal with the unethical levels of cases we have, but it will be one of the best business investments that can be made when you look at this criminal justice system,” Monahan said during a presentation to the House Appropriations Subcommittee on Justice and the Judiciary on Thursday.

Monahan said the move is a step in the right direction, but the agency will still be subject to other reductions if Bevin’s proposal to cut most state agencies by 4.5 percent this year and 9 percent for the next two years is approved by the General Assembly.

Kentucky public defenders represent clients who can’t afford to hire a lawyer. They handled about 153,000 cases in 2015, up from 137,000 in 2006.

Thomas Galvez/Creative Commons

Kentucky’s new education commissioner says proposed state budget cuts would hurt a range of school services including preschool and efforts to bolster reading and math skills.

Commissioner Stephen Pruitt told state lawmakers on Wednesday that Gov. Matt Bevin’s proposed cuts in the current fiscal year and in the next two years would affect school districts statewide.

He says the full brunt of the cuts can’t be totally absorbed at state Department of Education headquarters. The central office accounts for a fraction of the overall education budget.

Pruitt praised Bevin for sparing the state’s main funding formula for K-12 education from the cuts.

But he says the governor’s proposed cuts in the current year and in the next two years could hurt extended school services, professional development and school safety programs.

Bevin's Proposed Cuts Include Funding for Watchdog Agency

Feb 14, 2016
Ryland Barton, WKU Public Radio

As part of his proposed budget cuts, Republican Gov. Matt Bevin exempted what he considered to be key government services. Those not protected include agencies charged with holding him and his administration accountable.

Katie Gabhart, the executive director of the Executive Branch Ethics Commission, said the proposed 4.5 percent budget cut this year and the 9 percent cut over the next two years will devastate the agency. She said it would force her to lay off the agency's sole investigator and auditor, two employees who already work part time.

"We will be an investigative and auditing agency with no investigator and auditor," Gabhart told House lawmakers this week. "Public servants are going to violate the ethics code ... and if they know we have an ethics commission with so few resources that we can't enforce the code, then what is the point of having one?"

The cuts also include the Registry of Election Finance, the agency that makes sure politicians follow the rules when they raise and spend money for their campaigns. Executive Director John Steffen said the agency could not sustain a 9 percent cut and would not be able to hire an auditor. In response, House lawmakers suggested changing state law so fewer candidates would have to file disclosure reports.

WKU

Governor Matt Bevin wants to influence any performance-based funding model used by Kentucky universities.

The leaders of the state’s public schools and the Council on Postsecondary Education have been working for 18 months on a proposed formula for any new funding they receive.

But not only are universities not in line to receive new funding in the next state budget, they’re facing significant cuts.

Western Kentucky University Vice President of Public Affairs Robbin Taylor says Bevin has indicated he wants any such model to be based largely on how well schools help address workforce development needs.

Taylor says she thinks schools now have to re-evaluate what they’ve been working on.

"I don't want to say this negates all that, but it sort of puts all that on hold. As the Governor has indicated, he didn't think it went far enough, and he'd like to be a part of making those decisions, and has indicated his desire to work with the university presidents and the Council on Postsecondary Education to come up with those measures."

WKU

In an e-mail to faculty and staff late Wednesday afternoon, WKU President Gary Ransdell said Governor Matt Bevin's proposed budget cuts to higher education present a substantial challenge to the university.

Bevin's proposal calls for a 4.5 percent budget cut this fiscal year. That translates to $3.3 million out of WKU's budget by the end of June. Nine percent reductions would go into effect after that.

"There are many details of this plan that are yet to be understood, and with regard to performance funding, those details have yet to be defined," Ransdell said in his message. "So we are a long way from fully knowing how WKU will be impacted by these proposals.  I am confident, however, that WKU will fare well in any measure that is outcome or performance based.

Ransdell says the budget contains at least one bright spot for WKU. Gov. Bevin's budget proposal contains an equity funding appropriation for both WKU and Northern Kentucky University. Ransdell says the appropriation would held "level the playing field for our students who are paying a disproportionate share of their education in comparison to students at other Kentucky universities."

Rob Canning

Gov. Matt Bevin has proposed 9 percent cuts to most state government agencies over the next two years in an effort to reduce state spending by $650 million.

Bevin proposed his first budget on Tuesday evening in an address to the Kentucky General Assembly, which will use much of the 2016 session to forge a state spending plan based, at least in part, on Bevin’s proposal.

Bevin, a Republican, entered office last month promising to put Kentucky’s “financial house in order.” His Democratic predecessor, Steve Beshear, offered an optimistic outlook of Kentucky’s fiscal shape before he left office. But Bevin has taken a dimmer view, citing underfunded pension systems and a $250 million payment for expanded Medicaid.

Bevin said Tuesday he would also issue an executive order to cut state spending by 4.5 percent across the board during the current fiscal year, which ends in June.

During a meeting with reporters Tuesday before his formal budget address, Bevin said individual cabinet secretaries would responsible for cutting the budgets of state agencies they oversee.

WFPL News

Gov. Matt Bevin unveils his proposal Tuesday night for how Kentucky state government should spend a little more than $20 billion over the next two years.

The much-anticipated budget address will provide a granular glimpse into the new governor’s priorities and just how he plans to put the state’s “financial house in order,” as he’s promised.

Last month, Bevin became only the second Republican governor of Kentucky in more than 40 years, and his stances during last year’s campaign pointed to a strong preference for fiscal thriftiness.

Kentucky’s revenues are growing — the state is estimated to rake in about $900,000 more over the next two years.

But so are costs.

WFPL News

Less than a week before Gov. Matt Bevin gives his formal state budget proposal, Republican Senate President Robert Stivers, Bevin’s ally, gave an ominous prediction.

“I think this budget that will be introduced and proposed by the executive branch will be one of the most austere budgets that I’ve seen in my 20 years in the General Assembly,” Stivers said Wednesday on the Senate floor.

Bevin, a Republican, suggested just as much when he was campaigning, saying that the state would have to undergo “belt-tightening across the board” during a debate on KET.

At issue are mounting obligations in the state pension systems and Medicaid program. The Kentucky Teacher Retirement Systems has requested about $1 billion in additional contributions from the state to meet its obligations to retirees. Meanwhile, the state will have to start paying an increased share of a Medicaid program that was expanded and now covers an additional 400,000 Kentuckians. That’s expected to cost $250 million in 2017.

Democratic House Speaker Greg Stumbo took a slightly more optimistic position, saying that the state is predicted to rake in more revenue over the next two years.

Kentucky Revenue Receipts Suggest Slow Growth

Aug 11, 2014
Creative Commons

New data released by the state’s budget office suggest that Kentucky’s General Fund isn’t growing fast enough, and could lead to another budget shortfall.

July receipts show that Kentucky brought in about $706 million in July, a 2.2 increase over last year.

But Jason Bailey, director for the nonpartisan Kentucky Center for Economic Progress, says that the sluggish growth won’t be enough to meet official revenue projections.

“Two-point-two percent growth for July, which is better than zero, but still lower than what we need for the year which is about 3.6 percent to avoid another budget shortfall,” said Bailey.

The data show that while income and sale tax receipts grew by single digits, returns on corporate and property taxes were down 64 and 45 percent, respectively.

Gov. Steve Beshear recently plugged a $90.9 million shortfall in the previous year’s budget that was chiefly caused by a sharp decline in individual income tax receipts.

Gov. Steve Beshear issued a pair of executive orders this week reducing state spending levels to plug a $90.9-million hole in Kentucky's budget.

The Office of the State Budget Director announced the shortfall last week, which is due largely to an unexpected $63-million decline in income related to capital gains. 

Beshear's cuts cover the $90.9-million gap.

In a statement released Wednesday night, Beshear said the state was "somewhat limited" in its approach to filling the budget hole.

“But as in previous reductions, two goals guided our decisions—to take steps to make government as efficient and as lean as possible, and to protect as best we can the core services that offer help and hope to our people and represent important long-term investments in Kentucky’s future: education, health care and public safety," Beshear said in the released statement.

Beshear Plugs $91 Million Budget Shortfall

Jul 17, 2014

Kentucky Governor Steve Beshear has signed an order to cover a $91 deficit in the state's $9.5 billion state budget.

State officials announced the shortfall last week following sluggish collections on state income taxes. Beshear's order cuts $3 million in state spending. He made up the rest by transferring money from other sources, including $21.2 million from the state's reserves. State officials said they had few options to make up the deficit because the shortfall came at the end of the fiscal year when most of the money had already been spent.

Beshear's order also dealt with a $22.1 million shortfall in the state's road fund, with just $300,000 in cuts to construction projects.

This was the 14th budget reduction Beshear has implemented since taking office in 2007.

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