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Beshear hopes Obama will offer stimulus plan

When Gov. Steve Beshear joined other governors to meet with President-elect Barack Obama Monday night, he expected to make a pitch for a stimulus plan for states that could include cash to help struggling programs.

Beshear and other state leaders were scheduled to sit down with Obama in Philadelphia, first at an informal session Monday evening, then in a formal conference Tuesday morning.

"We're going to be talking about a number of possibilities to help us with this situation we find ourselves in," Beshear said. "Obviously an infrastructure stimulus package would help Kentucky as well as other states in helping people get back to work."

Beshear said he and other governors also are expected to ask for help to bolster Medicaid programs and unemployment insurance funds that are running low as jobless rates take off. Beshear also mentioned the possibility of a direct "cash infusion" from the federal government to state coffers, similar to what the Bush administration approved earlier this decade.

"Back in 2002 and 2003 when there was a stimulus package, there was a direct cash infusion back to the states on some type of formula basis," Beshear said.

He declined to say whether he prefers that approach now.

"I'm certainly going to be pushing for all the types of stimulus packages to weather this storm," he said. "It is not going to be easy."

Kentucky's government faces a shortfall of $456 million shortfall, or roughly 5.1 percent less than the General Assembly had budgeted for this fiscal year, which ends June 30.

Beshear has asked all agencies, public schools and universities to draw up plans to cut their budgets mid-year by 4 percent. Those plans are due to his office by Friday.

After that, Beshear said, he will look at ways to cut spending or propose revenue increases.

"We hope to be able in the early part of December to put out a plan," he told reporters at a news conference announcing a new biofuels project at Eastern Kentucky University. "I want to have discussions with legislators before we do that."

Rep. Harry Moberly, the House budget committee chairman, said he will support a steep increase in the state's 30-cents-per-pack cigarette tax — something he has advocated in the past.

Although in the last session the House approved a quarter-per-pack increase that went nowhere in the state Senate, Moberly said "we can do better than that now." He suggested a 70-cent hike in the tax.

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