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Local News Noise & Notes Politics

Beshear Orders Two Percent Cuts to State Spending

Kentucky Governor Steve Beshear is ordering most state agencies to cut their budgets by two percent for the current fiscal year, but that will not be enough to close a $190 million budget shortfall.

The decision was announced by State Budget Director Mary Lassiter at a joint budget committee meeting Tuesday. The plan will not include furloughs for state employees as the governor previously ordered, but it could mean agencies deciding to laying off workers.

State lawmakers mandated the governor make the cuts in this year’s budget, but the additional 2 percent cuts will save only $29 million. Several of the cuts are being made to “non-priority” programs since the administration has exempted the Department of Corrections, Medicaid, public schools, state universities and student financial aid.

Lassister told the committee another $60 million in savings will come from funds that were originally appropriated to meet debt service on building projects that will not be needed. Another $75 million is anticipated to come from a revenue surplus, but lawmakers are still concerned that additional cuts will have to be made during the General Assembly next year.

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Local News

Brighter Picture For State Revenue

Kentucky general fund revenues grew 6.6 percent in January — a $45 million increase over last year. Budget Director Mary Lassiter reports the state is likely to meet or slightly exceed the revenue estimate for the year. The result would be a balanced state budget or even a small surplus.

The one revenue source not growing – sales tax receipts. Lassiter says that’s a sign of Kentucky’s high unemployment rate.

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Local News

Kentucky FY10 Receipts Down, But Outlook Positive

By Rick Howlett

State Budget Director Mary Lassiter says Kentucky’s General Fund receipts declined for the second straight year, the first time the state has seen a consecutive decline since the end of World War II.

She says tax collections for the just-ended fiscal year hit their lowest point in five years.

General Fund receipts for the period were just over $8.2 billion, a 2.4 percent decline from the previous year.

Lassiter says on the positive side, revenues improved over the course of the fiscal year, with the final quarter growing by 0.4 percent. She says it’s a hopeful sign that the economy has begun its turnaround.