Bevin orders cuts to fix $152 million budget gap, warns of more problems ahead
LOUISVILLE, Ky. (WDRB) -- Gov. Matt Bevin on Friday ordered a mix of budget cuts to state agencies and transfers of restricted state funds to fix a $152 million shortfall in the state’s $10.6 billion budget for the fiscal year that ended June 30.
John Chilton, Bevin’s budget director, said in a press release that the state expects “an ongoing challenge with revenues” in the current fiscal year.
Bevin, in the release, said the situation “dramatically underscores the critical need for fixing Kentucky's broken pension systems and modernizing the state’s tax code."
Bevin plans to call a special legislative session in the fall aimed at passing an overhaul of the state’s tax code and public employee pension plans.
Bevin spared some agencies – such as public universities – from the cuts he ordered Friday.
An executive order released Friday shows that the state’s Medicaid program, which provides health coverage to the poor and disabled, provided the single-biggest source of savings.
Bevin’s press release said his administration cut costs by renegotiating contracts with the managed care organizations – such as Passport Health Plan in Louisville – that administer Medicaid benefits in the state, as well as lower-than-expected prescription drug costs in the program.
The executive order shows that Medicaid took a $38 million reduction in its $1.7 billion budget for benefits.
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