FRANKFORT, Ky. (WHAS11) -- Nearly every agency of Kentucky government faces "damaging" budget cuts in order for the commonwealth to adequately fund K-12 education, Gov. Steve Beshear told lawmakers Tuesday night.
In prepared remarks provided to WHAS11 in advance of his budget address, Beshear (D) said he was presenting his final two-year budget as governor with both pride and regret.
"Regret, because the choices reflected in this document do great harm to many state programs and services needed by Kentuckians," Beshear said.
At least 19 state agencies face a five percent budget reduction in Beshear's plan. Several others -- Kentucky State Police, universities and the Kentucky Community and Technical College System face 2.5 percent cuts.
"But pride," Beshear continued, "Pride because those same choices empower us to make bold investments in the intellectual capital and economic competitiveness that Kentucky's future demands."
The governor's office said the budget increases per-pupil K-12 funding to its highest level ever, restores previous cuts to teacher training, textbooks, school safety and Extended School Services and expands pre-school services to more than 5,100 additional children.
Teachers would get a two percent raise in the first year of the budget and an additional one percent raise the following year.
State employees would also receive a salary increase, the first in four years.
In addition to budget cuts, Beshear said his administration would fund the budget with transfers from unused and underused funds, savings created by federal health care reform and careful management of the state's debt service.
The budget also reflects Beshear's 2013 decision to expand Medicaid eligibility and create a state-based health insurance exchange within the framework of the "Obamacare," the Affordable Care Act.
Beshear calls for a $65.7 million increase in Medicaid funding in fiscal 2015, and an additional $124.5 million in fiscal 2016.
Though Beshear said the Medicaid expansion is fully funded with federal dollars, Kentucky pays administrative costs and is responsible for Medicaid recipients who would have qualified before the expansion.