For Immediate Release
October 26, 2001
Contact:   James R. Ramsey: (502) 564-2611(502) 564-7300

Governor manages budget shortfall, maintains education funding

FRANKFORT, KY  - “For too long we have under invested in education; for too long the first thing to be cut in a revenue shortfall was education.  Today I maintain my commitment to our highest priority – education.”

Governor Paul Patton made this comment today when he presented a plan to balance the state budget given the most recent revenue projections.

The Consensus Forecasting Group revised the current year General Fund estimate downward by approximately $171 million on October 15.  This revenue shortfall contributes to a total budget shortfall of $206.

Governor Patton explained that were forced to make major adjustments of $180 million in the prior year and $326 million earlier in this fiscal year. The total of these budget adjustments is approximately $713 million. 

The Governor explained that we have managed these cuts without reducing funding for classroom instruction in either K-12 or postsecondary education.

The Governor announced that a combination of management efficiencies, fund transfers and budget cuts would take place to meet the most recent revised revenue estimate. 

“Our cabinets and agencies will be required to cut another 2 percent from their budgets.  Earlier this year our cabinets and agencies were forced to cut budgets by approximately 3 percent,” he said. “We will do the best we can to maintain our most important human services programs and other critical needs with fewer resources.  This presents a huge challenge and unfortunately programs will be impacted.”

Dr. Jim Ramsey, state budget director, said: “Kentucky is among nearly 40 states experiencing a significant revenue shortfall as a result of a weak national economy exacerbated by the events of September 11.”

Over the past year, states in the midwest and southeast have been heavily impacted by a recession in the manufacturing sector of the economy.  Today that weakness has affected the travel industry, financial services industry, business services industry and the air travel industry.  As a result, approximately 75 percent of the states are being forced to make mid-year budget cuts.

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