Kentucky governor seeks budget cuts of 17 percent

Posted at 12:31 PM, Sep 08, 2017
and last updated 2017-09-08 14:18:44-04

FRANKFORT, Ky. (AP) — Facing dwindling reserves and a projected $200 million shortfall, Kentucky’s Republican governor ordered budget cuts of more than 17 percent across most state agencies on Friday while asking for similar reductions from other branches of government he does not control.

Gov. Matt Bevin announced the cuts in a series of letters from his state budget director to various government officials on Friday. Kentucky ended the 2017 fiscal year on June 30 with a $138 million shortfall. Last month, a group of state economists predicted the state was headed for another shortfall of $200 million for the 2018 fiscal year. State Budget Director John Chilton said the state’s reserves will run out of money by then and won’t be available to cover it.

Chilton said the plan is to come up with $350 million, enough to eliminate the $200 million shortfall and put $150 million back into Kentucky’s savings account to protect the state’s credit rating. He said that would require budget cuts of 17.4 percent across most of state government. The cuts do not apply to public colleges and universities, Medicaid, K-12 education, the state prison system or debt.

“While challenging, the current fiscal constraints present a unique opportunity to evaluate the effectiveness and necessity of programs within state government,” Chilton wrote in the letters. “Limited resources must be allocated to programs providing critical services and a strong return on investment.”

The $200 million shortfall is based on a planning estimate approved last month by the Consensus Forecasting Group, a panel of economists responsible for predicting state revenues. The estimate will not be finalized until December, but Bevin spokeswoman Amanda Stamper said the state “can’t wait until then to begin tightening the belt.”

While Bevin says the state needs an extra $350 million, so far he has only identified $82.5 million in cuts. Stamper said the rest of the money would come from cuts to the executive branch, but did not say what those cuts would be.

Of the $82.5 million in cuts Bevin identified Friday, he does not have authority over at least $56 million of that money. That’s because it belongs to other branches of government that Bevin does not control, including the court system, the state legislature and five state constitutional officers. Bevin can only ask for those agencies to cut their budgets.

Of the five constitutional officers, Bevin has asked for cuts totaling $6.3 million. That includes a $1.9 million cut for Democratic Attorney General Andy Beshear, Bevin’s rival and potential opponent in the 2019 election. A spokesman for Beshear did not respond to a request for comment.

Bevin also asked for cuts of more than $28 million for the state court system and $3.4 million from the state legislature. A spokeswoman for the Administrative Office of the Courts did not immediately respond to a request for comment. The cuts to the state legislature would need to be approved by the president of the Senate and the speaker of the House, both Republicans. A spokesman for Republican Senate President Robert Stivers said leaders needed time to review the request.

Bevin ordered a $958,000 cut for the governor’s office.