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Beshear takes 10% pay cut

FRANKFORT — Gov. Steve Beshear and Lt. Gov. Daniel Mongiardo — along with five key administration members — will take a voluntary 10 percent pay cut in 2009 to save the state $100,000.

Beshear, who makes $124,000 a year, said Monday that the salary cuts are not a publicity stunt but a symbolic way to show he is "willing to share the pain" in pending state budget cuts.

Still, the governor said he will not ask other political appointees in his administration to volunteer for pay cuts. "Many of those folks actually took a pay cut to come to work for my administration," he said.

The move comes days before the Democratic governor is expected to present his plan to address a $456.1 million, or 5.1 percent, budget shortfall for this fiscal year, which ends June 30. Beshear has said he will implement painful cuts and might call for an increase in the state's cigarette tax.

It will be difficult for Beshear to win legislative approval of any tax increases.

"If he is truly empathetic with Kentuckians' financial situation, perhaps a more appropriate response would be to join me in holding the line on taxes," Senate President David Williams, R-Burkesville, said in a statement.

Beshear said he will meet with legislative leaders in the next few days to discuss his shortfall plan, which will cover the entire projected amount.

Beshear spokesman Jay Blanton noted that Williams recently has expressed to the news media a willingness to work with the governor.

"We hope that's the Senator Williams that shows up to meet with Governor Beshear in a spirit of cooperation as we seek to address the financial challenges confronting Kentucky," Blanton said.

Meanwhile, the chiefs of two key portions of state government — K-12 education and Medicaid — said Monday that any cuts to their budgets would be devastating for children, the poor and disabled.

Beshear has asked all state agencies to tell him what effect a 4 percent cut would have on their budgets.

Education

Kentucky Education Commissioner Jon Draud said such a cut would have "devastating long- and short-term effects on Kentucky schools.

Draud said he is encouraging budget officials "to consider the full impact on the state's public school system as they work to meet the demands of this tight budget."

Lisa Gross, spokeswoman for the state Department of Education, later said Draud was not yet making a case for elementary and secondary schools to be exempt from any budget cuts.

"I don't think we're at that point yet," Gross said. "What the governor and his state budget director's office have said is just come up with a plan. They haven't said 'tell us why you ought to be passed over.' "

Draud, using information from school superintendents, said a 4 percent cut in education would:

■ Force 36 school districts to reduce staff for the current year, including hiring freezes and layoffs of classified staff — including janitors and cafeteria workers — in some cases.

■ Require at least 142 school districts to reduce staff for the 2009-2010 school year.

■ Require 33 districts to reduce Flexible Focus programs, such as extended school services, safe schools and professional development.

■ Cause 28 districts to cut back or eliminate major equipment purchases, such as school buses, for the rest of the fiscal year.

Draud said five districts would have to consider paring full-day kindergarten to half-day programs, and three districts might have to suspend facility plans or halt construction of new schools.

Draud also expressed concern that 51 school systems — including Fayette County — have said they could weather cuts by using their districts' contingency funds.

That could push the funds of dozens of districts below the state-mandated 2 percent minimum, making it more difficult to deal with expected budget shortfalls next year, he said.

Beshear said he sympathized with Draud's concerns but reiterated that the cuts "are going to be very painful on everybody."

Medicaid

The state's insurance program for the poor and disabled faces a substantial shortfall even before any budget cuts, Betsy Johnson, state Medicaid commissioner, told a legislative Medicaid oversight committee in Frankfort.

Going into fiscal 2009, which began July 1, Medicaid was expected to run a $183 million shortfall. But more people are enrolling in Medicaid than the state budgeted, Johnson said. That means the previous budget shortfall is way off the mark.

The state had budgeted for 1,000 new enrollments a month, but 3,000 new people have been enrolling each month. In all, 740,000 Kentuckians are enrolled in Medicaid.

Johnson would not say after Monday's meeting whether the Cabinet for Health and Family Services had recommended that Beshear not reduce any funding to Medicaid.

Johnson said that a recent study showed that when unemployment numbers climb, the number of people joining Medicaid also increases.

"The situation will only worsen," Johnson said of the economy.

Even if Medicaid can implement all of a host of cost-saving measures, it still won't be able to make up for the growing numbers of people turning to the system for health care, she said.

Any reductions in services or caps on the number of people able to join the program would only cause more pain to people already in dire straits, Johnson said.

Johnson said the state needs new revenue and hopes that Congress will pass a stimulus package that would include an increase in the amount of money the federal government pays for the program. Typically the federal government pays 70 percent of the cost of Medicaid.

The governor remained non-committal on Monday about raising the 30 cent-a-pack state cigarette tax but said he thought the move last week by the Kentucky Farm Bureau to relax its long-standing opposition to increasing the tax was "progressive."

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