Wednesday, Dec 30 at 1:35 AM
(Political Blog) Forget building the Ohio River bridges, Governor Steve Beshear may have to rebuild some burned bridges in Frankfort to address the budget shortfall in the next two fiscal years. As seen in this report on WHAS11 News, Senate President David Williams enters the session angry at Beshear and continuing to question Beshear's abilities, scruples and honesty.
The core issue around which the allegations swirl is expanded gaming. Williams says Beshear is exaggerating the amount of the budget shortfall (Beshear says its $1.5 billion and growing, Williams says it's closer to $900 million and manageable) in order to coerce lawmakers to approve of slot machines at Kentucky racetracks.
"The governor has been trying to create a disaster, a financial disaster to advance his gambling agenda." Williams said.
"What I'm laying out are the facts," Beshear insisted, "I don't think we can argue much with the numbers that we see." From that first assertion, the governor appears overly optimistic in the comity of the 2010 General Assembly.
I had asked the Senate President why he didn't simply embrace the governor's larger shortfall estimate in order to advance William's aim for a more fundamental paring of state spending. "What I try to do," Williams responded, "is to make sure that we manage the government and try to provide essential services, and try to seek excellence in the things that we do with the amount of money that we have available to do that."
Williams suggests across the board cuts at state agencies, whose leaders could decide how to best reach the percentage cut handed down to them.
Williams alleges that Beshear's cost-cutting claims of the last two years are bogus, that 1000 of the 1600 job cuts Beshear talks about are simply due to retirements of state workers and that the governor refuses to make tough choices.
"This is going to require more than ever before a cooperative and bipartisan working relationship between the legislature and the governor's office," Beshear said.
Good luck with that.
Williams says Beshear has damaged relations with the legislature by creating vacanies in the state senate when Beshear appointed Republican senators to other more lucrative state positions.
"To take such an aggressive to try to do a coup d'etat over here in the Kentucky State Senate at a time when he expects us to sit down and reach some level of cooperation was not a good move on the governor's part," Williams said.
Beshear says other than a "broad-based tax increase," nothing is off the table when it comes to addressing the shortfall. including reviving the Video Lottery Terminals at racetracks proposal that has not been allowed out of a Senate committee in the past.
Beshear news release:
Governor: FY11-12 budget shortfall will reach unprecedented levels
Medicaid and debt service alone push shortfall to $1.5 billion
FRANKFORT, Ky. (Dec. 29, 2009) – Gov. Steve Beshear today briefed legislative leadership on the upcoming biennial state budget, and announced the shortfall is dramatically greater than has been discussed in the media.
Although the Consensus Forecasting Group (CFG) last week estimated revenue growth for the next two fiscal years, that growth is still not sufficient to fund existing expenses. Some reports regarding the CFG estimates said the shortfall is approximately $900 million over the next two years.
However, Gov. Beshear noted that figure lacks some key expenses, examples of which include growth in Medicaid and new debt service on bonds authorized by the General Assembly, which would push the shortfall to $1.5 billion. Other significant costs that would push the shortfall even higher include:
- retirement contribution increases;
- increased cost of health insurance for state workers, teachers and retirees;
- prison population growth;
- courthouses coming online; and
- needs in our education system.
“It’s critical that we – the General Assembly and I – have a clear picture of the real shortfall figure,” Gov. Beshear said. “With accurate information, we can make better decisions on balancing this budget.”
In addition, the current year budget still faces a revenue shortfall of $100 million. Gov. Beshear will present his plan to balance that budget next week. It will be the sixth time the governor has balanced Kentucky’s budget in less than two years. Like most other states, Kentucky is being squeezed by the global economic crisis.
Budget Actions to Date
Spending reductions and efficiencies have been a major part of the Governor’s budget balancing strategy. Since taking office, he has reduced spending by more than $850 million and reduced the state workforce by more than 1,600. However, Gov. Beshear’s commitment to state government’s core mission has enabled him to preserve funding for the SEEK formula for K-12 education, healthcare for our most vulnerable citizens, and certain public safety and economic development programs.
As a result, in the last round of budget cuts, 85 percent of state spending was exempted. That left 15 percent of government to bear the brunt of cuts, with some agencies reduced 20 percent to 25 percent.
“The cumulative impact of these cuts is troubling,” Beshear said. “Further significant cuts to some of these agencies could effectively close them down. We have to be innovative and inventive as we approach the next budget to ensure we continue to provide the services our citizens need.”
Gov. Beshear, who will present his proposed FY11-12 budget to the General Assembly on January 19, challenged legislative leaders to work with him and said he would welcome any ideas they may have for responsibly managing the upcoming budget.
“I’ll be working hard with my team to develop a responsible, thoughtful budget proposal that preserves our highest priorities to the greatest extent possible and meets the needs of our citizens,” Gov. Beshear said. “I invite any legislators who have thoughts on managing this budget to bring them to me. Kentuckians need leaders to work together during this difficult financial time.”