For
Immediate Release: Audio available: 1800-633-0119
Dec. 17, 2001
Contact: Terry Sebastian or Rusty Cheuvront (502) 564-2611
Dr. Jim Ramsey, State Budget Director, 502-564-2611 or 502-564-7300
Chart
of General Fund Reductions
December
2001 Revenue Estimate
Postsecondary Education Budget Reductions Chart
Gov.
Patton announces cuts to budget, spares K-12
“We must stay the course with our commitment to KERA and
our 176 school districts throughout the state,” Governor Patton said. “With
K-12 education comprising $3 billion of our total budget, it was very difficult
to balance this round of cuts without impacting elementary and secondary
education, but we have done so. Nothing we can do is more important.”
Along with postsecondary education,
Governor Patton also announced previously unidentified budget adjustments --
totaling $34 million -- necessary to balance the current budget.
·
The realization of $10.6 million in savings on Maintenance &
Operation
costs for new facilities in the
current year – facilities that will not be
completed this year;
·
The capture of approximately $5 million in appropriated tobacco
funds
for the Early Childhood program that
will not be needed in the current
year; and,
·
The transfer of $500,000 in interest income earned on tobacco
funds
in the current year.
The cuts in the budget are a result of the October 15
general fund revenue revisions of the Consensus Forecasting Group. On October
20, Governor Patton announced the framework for ensuring a balanced budget for
the current fiscal year, and last week the Consensus Forecasting Group indicated
that there would be no further revisions in the general fund estimates for the
current year.
The Governor also announced today
details of 2-percent budget cuts to state agencies that were previously
announced.
In October, the Governor announced that
each cabinet of state government would be required to identify a 2-percent cut
in their budget to help balance the state budget.
“We instructed our cabinet
secretaries to do everything possible to protect the delivery of important
services to the people of Kentucky and to try to avoid layoffs at this time,”
Patton said. “Our cabinet secretaries have implemented numerous management
initiatives such as reduced travel, reduced cell phone and reduced overtime and
compensatory time.”
These management initiatives have
allowed the state to minimize the impact on program and service delivery, he
said.
“But it is impossible to cut that
much out of the budget without having some impact on programs and services
important to our people,” Patton said. “Our task becomes more difficult as
we try to prepare our budget recommendations for FY03/FY04, which we will
present to the General Assembly in January.
“Slow growth in the national economy
translates to modest revenue growth in Kentucky. To minimize pain in the current
year, the state has utilized one-time resources that create a structural
imbalance that must be addressed in the next biennium. We must expect tight
fiscal constraints into the future.”
In October, the state did not identify
how it would manage the total of the budget adjustments that would need to be
made, he said.
“We believed it most prudent to wait
until December to see if the Consensus Forecasting Group further revised the
current year estimate,” he said. “They did not do so, so we have now
identified all of the adjustments that need to be made.”
Governor Patton further commented that, unfortunately, it
was necessary to cut the budgets for postsecondary education institutions and
that postsecondary education had been exempted from three previous rounds of
budget cuts.
“Throughout modern history, the first area cut during a
revenue shortfall was higher education. We were able to exempt higher education
through three rounds of cuts last year and this year; unfortunately, we could no
longer make the numbers work without a cut at this time,” Patton said. “I
have been assured by President Gordon Davies and the leaders of our campuses
throughout the state that they have been preparing for such adjustments and that
these cuts will not sidetrack the progress we have made in implementing the
Postsecondary Education Reform Act of 1997.”
Governor Patton also commented that the $5 million of
unneeded Early Childhood funding in no way lessened his commitment to this
important initiative. The Governor noted that, as with any new startup program,
it takes time to implement the numerous components comprising the program’s
budget.
Early Childhood Development Director Dr. Kim Townley “has
been fiscally responsible in her program development to ensure that we were not
just spending money to spend money, rather we are spending our funds to ensure
that our Early Childhood initiatives are phased in to have the maximum benefit
on our young people,” Patton said.
Governor Patton further noted that he continues to be
committed to designating 25 percent of the tobacco funds received from the
Master Settlement Agreement to the Early Childhood Program in the future.
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