For Immediate Release
December 4, 2002
Contact: Rusty Cheuvront or Terry Sebastian, (502) 564-2611 

GOVERNOR ISSUES MORE COST CUTTING DIRECTIVES

FRANKFORT, Ky. -- Governor Paul Patton today signed an Executive Order directing all executive branch cabinets and agencies to continue to implement reductions in administrative costs begun in FY 2001 and to implement additional measures immediately to help address the budget deficit faced by the Commonwealth in the current fiscal year. 

“These are significant cost saving measures. However, these reductions will not solve the record revenue shortfall facing our state,” Governor Patton said. “Our management team has already produced over $30 million in savings through cuts in administrative costs during the past year which were applied to a shortfall of $687 million. The measures announced today could result in as much as an additional $30 million in savings in the current year, but the state is facing an additional $500 million budget shortfall in the current biennium.” 

“Every state agency will face some very difficult decisions in the days and months ahead as we do our best to balance service delivery with increased costs and reduced revenue,” Patton said. “I am also requesting local school districts, state universities, and the other branches of government to consider similar measures.” 

The Governor’s Executive Order has directed state agencies to comply with the following measures: 

·        REDUCTION OF STATE WORK FORCE  --  of at least 1,000 employees by December of 2003 through retirement or normal attrition.

·        MORATORIUM ON NEW AND REDUCTION IN EXISTING PERSONAL SERVICE CONTRACTS

·        REDUCTION IN STATE MOTOR VEHICLE FLEET --  downsize the state motor vehicle fleet by 500 vehicles.

·        REDUCTION IN STATE UTILITY COSTS --  strengthen the energy savings program in an effort to achieve a government wide savings goal of 10% of total utility costs. 

·        MORATORIUM ON NEW STATE LEASES AND RENTAL EXPENSES  --  no improvements to and no expansion of state agencies into additional office space in either state owned or leased buildings.

·        REDUCTION IN STATE TRAVEL EXPENSES --  executive branch agencies have already reduced travel in FY 02 by $2.5 million and will be asked to reduce out-of-state travel by an additional 25%. In-state travel will be reduced by 10%.

·        REDUCTION OF PRINTING COSTS FOR STATE AGENCIES --  all printing requests will be submitted to the state’s Division of Printing for review to ensure printing is accomplished in the most cost effective manner.

·        CURTAILMENT OF EQUIPMENT AND FURNITURE PURCHASES --  all state agencies are directed to curtail all non-essential purchases.

·        SALE OF SURPLUS PROPERTY  --  all state agencies are directed to immediately review their inventories and dispose of surplus properties and equipment that could generate cash for operations of state government.

·        CONTINUATION OF LIMITS ON OVERTIME AND COMPENSATORY TIME – a savings of $25 million has resulted since July 2001 implementation. 

“This is one of many steps we are taking to address our budget shortfall. Last week, I directed all executive branch cabinets and agencies to prepare an analysis of the effect of a 2.6 percent reduction in appropriations in FY 03 and 5.2 percent in FY 04,” Patton said. “We will be sharing details of those analyses next week so that we can begin a dialogue with legislators and effected groups on the choices we face. I am convinced that cuts of this magnitude would have devastating impacts to Kentucky’s progress in education and other key areas.

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* Attachment (Executive Order)