Gov. Matt Bevin’s first state budget proposal recommends that the state cut spending by 9 percent in the next two fiscal years. He also wants spending in the current fiscal year to be slashed by 4.5 percent.
The grand total in savings will be $650 million, according to the governor’s office.
In an address to state legislators on Tuesday, Bevin said the cuts would help the state put its “financial house in order” and make large contributions to pension systems without borrowing money.
“I will not sign any budget that encumbers future generations with debt that we refuse to take responsibility for today,” Bevin said during his address.
Immediately afterward, Bevin’s plan drew praise and also concerns from General Assembly leaders.
House Speaker Greg Stumbo has proposed bonding $3.3 billion to shore up the pension system, a plan that gained favor with House Democrats last year but never got traction in the Republican-led Senate.
After Bevin’s speech, Stumbo said the governor’s plan doesn’t identify enough money to help the pension system.
“You’re either going to have to increase revenues in taxes some way, which nobody’s for. Or you’re going to have to do some form of a bond while the window’s there. If you wait too long, the window’s going to close,” Stumbo said.
Stumbo was resigned to the idea that this year’s budget will likely involve steep cuts.
“It’s his administration. If he feels like those agencies can get along without those monies, then we may not argue with them,” Stumbo said.
Bevin did not eliminate funding for the Kentucky Arts Council despite rumors over the past few weeks that he would. The governor lowered funding for the agency from just below $2.8 million to a little more than $2.6 million.
Bevin carved out several programs from the cuts, including the Department of Veterans Affairs, Medicaid and SEEK, the public school funding formula.
Democratic Rep. Rocky Adkins, the House majority floor leader, said he was concerned about cuts to higher education, which was not exempted from Bevin’s plan for budget cuts.
“On the 4.5 percent cut in the current fiscal year, I think it’s a tremendous challenge for higher education and other agencies as we move ahead,” Adkins said.
Republican Rep. Jeff Hoover, the House minority leader, said some members have “heartburn” about cutting state universities.
“I know there will be some concerns about the higher education portion. That is something that I know the members of the House will want to look at in the next few days,” Hoover said.
But for the most part, Republicans were delighted by Bevin’s speech.
Senate Majority Leader Damon Thayer, a Republican from Georgetown, said it’s likely the Republican-led Senate will run with Bevin’s proposals.
When asked if Bevin’s cuts would lead to layoffs, Thayer said Bevin’s proposal shouldn’t surprise anybody because he campaigned on making government smaller.
“There are elements of government that are going to have to make tough choices,” Thayer said
Now that Bevin has made his proposal, the House will take up the bill and make its own offer. Then the Senate will make changes to the House bill. Leaders from both chambers will hammer out a final version before it heads to the governor’s desk.
Exempted from executive branch spending cuts were:
- Department of Veterans Affairs
The SEEK Formula, which provides funding for public schools
Local school district health insurance
Kentucky Retirement Systems and Kentucky Teacher Retirement Systems
Financial aid for higher education
Funding for services created by the 2015 Heroin Bill
Coal severance programs
State Police troopers, corrections workers
Social worker salaries
Commonwealth attorneys, county attorneys, public defenders
Board of Elections
Necessary government expenses
(Caption: Gov. Matt Bevin makes his first state budget proposal, via J. Tyler Franklin/WFPL News)