Governor Steve Beshear, D-Kentucky, will unveil his proposed two year budget Tuesday night in an address to a joint session of the Kentucky General Assembly.
"The budget decisions we face are horrible,” Beshear told lawmakers the last time he addressed the Senate and House during his State of the Commonwealth speech on January 4.
During that address he talked of finding “bold answers” to Kentucky’s problems. The budget address will force him to get down to brass tacks on Kentucky’s financial situation.
During a year end interview with ABC 36 News Beshear admitted lean times are ahead.
"While our revenues are starting to come back up, the stimulus money is gone and we're going to have as probably as big of hole if not bigger than we've had the last two years because of that,” Beshear said during the December 28 interview.
What Beshear does in his two year budget plan with SEEK, the basic funding source for Kentucky’s schools, will be one key decision.
Despite claims by the administration to the contrary, Senate President David Williams, R-Burkesville, says Beshear has already reduced basic funding for education during the current budget cycle.
"We had a reduction in the SEEK formula because of an under estimation of attendance by the governor in the last budget process,” Williams said at the 2012 legislative session got underway.
Williams claims there’s already a $70 million a year problem with the SEEK formula.
The Beshear administration has put state agencies on notice to brace for the possibility of a seven to nine percent reduction in their already diminished budgets. One strategy Beshear is not expected to use again is the furloughing of state workers. In the first year of the current budget he forced most workers to take six unpaid days off.
“We don't have any plans for furloughs on the table,” Beshear said during the year end interview.
"If furloughs are not on the table it well could be that there would be a call for a reduction in the workforce,” said Rep. Greg Stumbo, D-House Speaker. “Now there's two ways to do that, you could lay people off or let attrition take care of that."
Beshear still clings to casinos as the state’s long term panacea. "It is not going to help us over the next 18 months even if it passes, but long term we need to be looking at raising revenue in this state and there is a big hunk of money that doesn't come from raising anybody's taxes,” said Beshear.
“And, many of us are convinced it won't ever solve any problems,” Williams counters.
The budget address is scheduled for 7p.m. Tuesday. Kentucky’s new two year budget, which requires the approval of lawmakers, begins July 1.