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Financial woes are state's 2008 top story

FRANKFORT — Walloped by a series of financial blows, political leaders in Kentucky spent much of the past year looking for places to cut government spending, and as 2008 drew to a close, economists were warning of more misery ahead.

Gov. Steve Beshear originally whittled some $430 million out of the state budget in a move that affected a broad array of government services and even forced layoffs in some local governments and school districts. Then came news of additional shortfalls of $456 million in the general fund and $100 million in the road fund.

The financial woes were voted the top Kentucky story of 2008 by The Associated Press member newspapers and broadcasters. That was no surprise to Beshear, who has been forced to make broad cuts in government spending.

"Kentucky's state budget has been the most pressing issue for me in my first year as governor," he said. "My first directive has been to reduce state government spending because that's what families are doing all across the commonwealth during this trying economy."

Beshear, looking for ways to raise revenue to offset some of the nearly $1 billion in shortfalls, proposed in December raising the state's cigarette tax to $1 a pack and to double the tax on snuff and other tobacco products. That move, which Beshear believes is politically acceptable to most Kentuckians, would generate $81 million this fiscal year and $144 million the next — not nearly enough to offset the revenue losses.

To achieve that, the Democratic governor proposed cutting an additional $147 million in spending and taking nearly $179 million from the state's "rainy-day" fund.

The financial problems edged out a number of other high-profile events that made news over the past 12 months. That includes the continuing legal battles over Kentucky's death penalty, which took the No. 2 spot on the list of top stories.

A Kentucky case that questioned the legality of lethal injections made its way to the U.S. Supreme Court, which in April upheld the state's method for putting inmates to death, refusing claims by defense attorneys that lethal injections were cruel and unusual punishment.

Some seven months later, in November, Marco Allen Chapman, a confessed child-killer who waived appeals in an effort to expedite his death sentence, was executed. It was Kentucky's first execution in nine years.

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