Kentucky to close $156M budget gap without cutting schools or Medicaid, Beshear says

LOUISVILLE, Ky. (WDRB) — Kentucky plans to close a $156 million budget gap while keeping schools, Medicaid, and public safety fully funded.

Most state agencies will cut their budgets by about three percent, mainly by leaving vacant positions unfilled rather than cutting programs or laying off workers.

"We are going to be able to manage this shortfall and still provide necessary services to Kentuckians, with priorities including education funding, Medicaid, pension funding for educators and state employees and public safety," Gov. Andy Beshear said Thursday during his Team Kentucky Update.

The shortfall is smaller than first estimated. Stronger-than-expected revenue over the past three months lowered the gap from $305 million to $156 million.

The plan includes roughly $78 million in General Fund reductions and $28 million in unbudgeted funds. Beshear’s office and the lieutenant governor’s office will take part, while some other constitutional offices have declined or not yet submitted plans.

Lawmakers are expected to pass a new two-year budget during the legislative session starting in January. Beshear said services for Kentuckians will continue without disruption.