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I’m here today to begin a public discussion of the potentially cataclysmic impact of not
having a state budget come July 1.
Most people have analyzed the General Assembly’s failure to pass a budget for the 2011-2012
biennium in political terms.
They are upset with the legislature, and they have a right to be.
But I want to shift the conversation from political ramifications to the ramifications
for our Kentucky families, and the services and programs that state government provides
for them.
The truth is that if Kentucky enters the two-year biennium without an officially enacted spending
plan, every single family in this state will be affected in a negative way.
Now, I hope that doesn’t happen.
I don’t want that to happen.
And it doesn’t have to happen.
The General Assembly can put aside differences and get the job done.
I have been meeting with President Williams and Speaker Stumbo, and already there appears
to be progress on some outstanding issues.
I strongly urge them to continue that progress, and I pledge to continue to work with them
to facilitate an agreement in time for a special session that I will call in May.
I’m also today sending a letter to the entire legislative body encouraging cooperation and
consensus and outlining the potential impact on our people if they fail to come to an agreement.
While we are hopeful that they will reach an agreement, we must unfortunately prepare
for the possibility that they won’t.
Thus I have asked my Cabinet secretaries to begin planning for a potential shutdown of
certain state government services effective July 1.
We must know the implications of what we are facing if a budget is not enacted.
And yes, a shutdown – at least a partial shutdown – will be required.
It’s true that we have faced this same situation in recent years past, and in those years government
more or less continued to function using a spending plan written by the governor.
But life is different today.
The Supreme Court decision issued in the case of Fletcher v. Commonwealth in 2005 makes
it clear that only the General Assembly – not the Governor – has the authority to
appropriate funds.
The decision does grant exceptions for certain expenditures mandated by the Kentucky Constitution,
the federal government or state statute. But the extent of those exceptions is subject
to interpretation.
This decision has not been tested, and we are in uncharted territory.
My administration has been carefully reviewing this opinion and its impact on the operations,
functions, programs and services provided by state government.
Based on our analysis, it seems clear that in the absence of a budget, among the programs
and services we will be forced to shut down or cease are:
… all Kentucky state parks and tourism programs … economic development and job-creation
initiatives … the Office of the Medical Examiner ... and all state-provided mine safety
inspections and mine rescue teams.
In addition, the court case may require the termination of state funding for:
… State Police … Vehicle Enforcement … public colleges, universities and KCTCS
… existing road construction projects … veterans’ nursing homes … regulatory
and licensing agencies … and Health and Family Services programs, including Medicaid,
mental health hospitals, public health departments and aging services.
These lists are not comprehensive.
And we are still reviewing the complicated array of federal and state laws that must
be considered in this analysis.
But no matter how you interpret the many nuances of that court decision, numerous services
that our citizens depend on us to provide will not be available without an enacted budget.
The General Assembly can render all this moot by coming together as is their duty and passing
a budget, a budget that – hopefully – will be based on three principles.
One, it funds a state government that lives within its means.
The $1.5 billion shortfall is the seventh shortfall inflicted upon us by this global
recession since I became governor.
We’ve come together to solve the previous imbalances by carefully weighing our expenditures
against an increasingly tougher economic backdrop – the same strategy that families across
this state are employing around their kitchen tables.
We must not incur significant increases in new debt without a recurring revenue stream
to support it.
Two, this budget must not raise new taxes.
Now is not the time to increase the burden on our families and businesses – families
who are struggling to survive and businesses on which we’re counting to grow us out of
this recession.
And three, we must pass a budget that protects and preserves our priorities, as much as possible,
especially education.
If education is a priority, and to me it is, we must do everything humanly possible to
not go significantly backward in education funding, and we should not cut days from the
school calendar.
We need more education, not less. We want to be more competitive, not less. And we want
a brighter future for our children, not a dimmer one.
Our decisions about education also will directly impact our chances to win some $175 million
in federal Race to the Top funding.
Now, I proposed a budget at the beginning of the legislative session that honored these
three principles.
The General Assembly chose to put that budget aside and move in its own direction. While
I was disappointed with that decision, I understand the budget process and now am interested only
in helping them move forward.
But they must act quickly.
By law, we must have a budget by July 1. Practical reality demands we have one by June 1.
Because of the complexities of finance and bond issues, we need that time to put into
place various budget-balancing tools, including $113 million in savings from debt restructuring
and capturing other funds in the coming year alone, which were reflected in both the House
and the Senate budgets.
I firmly believe that consensus is achievable.
However, as governor of this commonwealth, it is my sworn duty to prepare Kentucky for
any emergency.
Therefore, while I fervently hope it doesn't come to this, I am preparing our government
and our people for life without a budget.
It is the only responsible thing to do.