LOUISVILLE, Ky. (WDRB) -- Kentucky's budget faces a $1.1 billion shortfall in fiscal year 2021 without another round of stimulus funding from Congress, Gov. Andy Beshear said Tuesday.
"What we're looking at right now without extra assistance is one of the most difficult years in budget-balancing that we have seen," he said. "This would be like letting Kentucky go bankrupt."
Kentucky's General Assembly only passed a one-year budget during this year's legislative session as the COVID-19 pandemic emerged.
Without additional federal help, Beshear said state agencies face cuts ranging from 16 percent to 29 percent.
"To put that in context, I believe our single biggest annual cut that I'm aware of in our history has been 12 percent," Beshear said.
Beshear said he had been in contact with Senate Majority Leader Mitch McConnell about the need for another round of COVID-19 relief money.
"I know there are some things that he wants to negotiate, and I don't get in the middle of the D.C. negotiation about other things that they want," he said. "I'm simply advocating for what we need in this state, whch is this type of budgetary relief. We need it sooner rather than later."
Beshear also announced Tuesday that the state has entered a $7.4 million contract with Ernst & Young for 300 workers to help process unemployment claims, particularly the roughly 56,000 unprocessed claims from March, April and May.
Two hundred Ernst & Young employees will begin Monday morning, immediately tripling the total number of workers handling unemployment claims, he said, noting that 100 of them had recently assisted Colorado process unemployment claims.
"The purpose is to get us caught up and to get us caught up quickly, not over five months" Beshear said. "This is designed to get us as close to caught up in one month."
The one-month contract will be paid through federal stimulus funding, Beshear said.
"Seems like a lot for a one-month contract," he said. "It is not if it gets us immediately caught up and it gives us 300 individuals from one of the most sophisticated companies in the world that has done this."
Beshear said it would cost the state about $30 million in a year to hire 300 more employees to handle unemployment claims, with four to six months needed for training.
"We simply can't wait," he said.
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