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State budget director Mary Lassiter has asked most state agencies to come up with a plan by May 23 to reduce their budgets by 4.5 percent for the new fiscal year that begins July 1.
Lassiter stressed that the reduction plans requested are for planning purposes. But she noted that any cuts implemented from the plans would be on top of reductions included in the $18.8 billion two-year budget the legislature enacted last month. Those cuts ranged from 3 percent to 12 percent.
She said possible cuts after review of the agencies' cost-cutting plans might be bigger or smaller than 4.5 percent, and that the amount of cuts for agencies could vary.
Some state agencies and programs are exempt from compiling a 4.5 percent reduction plan, Lassiter said. She said they include universities, basic education funding, Medicaid, corrections, property valuation administrators, commonwealth's attorneys and county attorneys.
In a May 12 letter, Lassiter informed most state agencies of the need to plan for additional 4.5 percent cuts. She said the agencies need only address the first year of the new budget.
Lassiter pointed out that the new two-year budget requires Gov. Steve Beshear to reduce General Fund expenditures in the executive branch by $179.9 million in the first year and $193.9 million in the second year.
"The budget bill language states that the expenditure reductions may come from, but not be limited to, attrition of the work force, including retirements, operating efficiencies and savings, debt restructuring and debt service savings," Lassiter said in her letter.
Asked Thursday whether layoffs will be needed, Lassiter said, "It's premature to talk about layoffs. We're just getting information right now."
Lassiter noted that her office, the governor and the Finance and Administration Cabinet have been trying to identify ways to deal with the mandated $179.9 million reduction in the first year.
"That work is ongoing and will directly impact the ultimate amount of expenditure reductions that must come from agency budgets," she said.
Cost-cutting plans from the agencies will include dollar amounts and the effects of any possible cuts, Lassiter said.
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