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Courier-Journal
December 19, 2003
Fletcher calls for new spending cuts
Public schools and Medicaid exempt from 2.5% reductions
FRANKFORT, Ky. – Gov. Ernie Fletcher announced plans yesterday to cut
the "operational expenses" of state government by 2.5 percent as soon
as possible as part of an effort to address the state's revenue problems.
But the cuts will exempt public schools and the Medicaid program for the poor
and disabled, said state Budget Director Bradford Cowgill.
Cowgill also requested a new official forecast of state revenues for this fiscal
year, which ends June 30. The group of experts that forecasts revenues for state
budget purposes, the Consensus Forecasting Group, will meet Monday to do that.
When implemented early next month, the new cuts will mark the fifth time in
three years that most state agencies have been ordered to trim spending because
revenues fell below expectations.
"We have inherited a budget crisis that has developed over the years and
are doing what's necessary to balance the budget without raising taxes,"
Fletcher said in a news release.
The specifics of the cuts won't be known until after cabinet secretaries report
their recommendations — which Fletcher could change — in two weeks.
But Wes Irvin, communications director for Fletcher, said the cuts will come
from "operational expenses, not program services."
Cowgill said Fletcher told cabinet secretaries to find the 2.5 percent in savings
in addition to any savings already being realized by efficiency moves imposed
by the 2003 legislature, by former Gov. Paul Patton and by the hiring freeze
ordered by Fletcher when he took office.
Cowgill said the governor's plan is to do more than required immediately to
meet an estimated $304million shortfall predicted in the current fiscal year.
That shortfall, he said, can be covered by savings achieved with the austerity
moves imposed over the past year, plus taking some remaining funds the state
has in reserve. Those funds include $68million in special federal relief sent
to Kentucky this year and about $54million in the state's Rainy Day fund.
The additional 2.5 percent in cuts would produce about $100million, money that
Cowgill said Fletcher and the General Assembly will use to help ease a much
greater budget problem that awaits the state in the fiscal year that begins
July 1, 2004.
Patton had estimated that the state will fall $710million short next year of
funding state programs at current levels.
Some state officials and advocates for state programs said they had expected
more cuts would be imposed this year. They had doubts that more cuts can be
made without pain.
"We've lost quite a few staff people due to hiring freezes that we haven't
replaced. That, on top of cuts made by the legislature early this year, has
made it very hard to do things we used to do, especially assisting struggling
schools," said Lisa Gross, spokeswoman for the Department of Education.
"So further cuts would be difficult."
Universities won't be exempt in this round of cuts. James Ramsey, president
of the University of Louisville, said all units within the university have developed
contingency plans to cope with cuts of up to 3 percent.
Ramsey said of more importance to universities is the larger shortfall expected
in the next fiscal year and how Fletcher plans to address that in the budget
he'll propose to the General Assembly next month.
"We're planning and will be prepared for whatever happens," Ramsey
said. But he said further cuts would cause a second consecutive year of big
tuition increases and could impair the university's ambitious goals for increasing
research funding.
Sheila Schuster, a lobbyist for mental health groups, said, "I don't think
much more can be cut without hurting services. ... I know there's no fat in
the system for mental health and mental retardation services."
Some key legislators said the action initiated by Fletcher seemed prudent,
but they were anxious to see what eventually would be cut.
"Because the current fiscal year is nearly half over, it's good that the
governor decided to act quickly," said Rep. Harry Moberly, D-Richmond,
chairman of the House budget committee. "I don't know if the cuts will
be painless because I haven't seen them. In my experience cuts are never painless.
But the approach of cutting recurring costs now that will help us with next
year's problem is a prudent approach."
Senate Republican Caucus Chairman Charlie Borders of Grayson said, "I
think the fact the governor wants to go a bit beyond covering this year's shortfall
is wise. But I must reserve final judgment until we see the final cuts. And
the key date here is later in January when he presents the new budget and we
see what sort of bigger cuts might be there."
Fletcher has a Jan. 27 deadline to submit a budget to the legislature.
A new official revenue forecast is required before Fletcher can issue the executive
order mandating the steps to be taken to balance this year's budget, Cowgill
said.
The $304million shortfall estimate is based on an October forecast, which said
revenue would fall short by $262million this year combined with $42 million
of additional required expenses that have emerged since the budget was enacted.
Cowgill said he expects the forecast will be changed only slightly — if
at all — when the group reconvenes.
The Kentucky Post
December 2, 2003
Forum looks for school funding solutions
Public provides input for problem
"Come and learn how YOU can be a part of helping to save education in
Kentucky," read the invitation from the Commonwealth Institute for Parent
Leadership in an invitation to "all interested citizens."
But only about 20 people decided they were interested enough to attend a public
forum Monday night on the fiscal crunch facing Kentucky's schools.
Many of them said they were already "CIPL fellows" -- graduates of
the institute's program to train parents as educational advocates.
Maria Kenner, who oversees the institute's Northern Kentucky region, said she
would have liked to have seen more parents at the forum, which was held at the
Scheben branch of the Boone County Public Library in Union.
"But I'm a firm believer that the people who were here were the people
who were supposed to be here," she said. "The word will get out."
Fort Thomas resident Traci Stark said the turnout was great, considering the
season.
The institute is part of the Prichard Committee for Academic Excellence, a
nonprofit, independent advocacy group for education in Kentucky.
The forum was part of the committee's effort to mobilize parents to support
a lawsuit that seeks to force the state to fund education adequately.
Forum participants heard from Covington School Superintendent Jack Moreland,
who recounted the history of the lawsuit that prompted the Kentucky Education
Reform Act of 1990.
He's also the president of the Council for Better Education, the group that
filed the lawsuit.
Various studies have estimated that it would take close to $900 million more
in annual funding to support Kentucky schools adequately, Moreland said. But
it's an especially bad time to seek more money for schools, because the state
faces a $700 million deficit, he said.
"It's the worst economic time any of us can remember in state government,"
he said.
State Rep. Jon Draud (R-Edgewood) said he doesn't believe that the new administration
of Governor-elect Ernie Fletcher can find $700 million worth of waste and balance
the budget.
He advocates raising the "sin" taxes on cigarettes and gambling.
Chris Derry, president of the Bluegrass Institute for Public Policy Solutions,
asked Draud how much more taxation Kentuckians could bear.
Increasing the sin taxes would only hurt those who gamble and smoke, Draud
replied.
Those are usually poor people, said Derry, who can least afford to pay taxes.
Whether or not people should smoke or gamble is a moral question, he said.
Barbie Wright, of Warsaw, said she liked Draud's idea. "But I don't smoke,
either," she said.
It surprised her, she said, that some people didn't seem to agree that the
state needs a tax increase.
Joe Wind, executive director for community and governmental relations at Northern
Kentucky University, explained to the group how what secondary schools do impacts
the university.
The region really needs post-graduate programs, he said. But NKU's ability
to offer those programs is hampered, he said, because it has to devote resources
to just getting students ready to do college-level work. That's more of a job
for the region's community college, Gateway Community and Technical College,
he said.
But that school is also suffering from funding problems -- it has a new building
in Boone County that it can't use for lack of funds, Wind said.
If secondary schools did a better job of preparing students for college, that
would help, he said.
That may be happening. Wind said that this year's freshmen are challenging
professors so much so that some have had to revise their syllabuses to keep
up with those students.
After the two-hour forum ended, Independence resident Phil Wiseman said he
appreciated the discussion, but real change will require parents and voters
to act.
Herald-Leader
December 19, 2003
Shumaker aides suspected of perjury
TENN. LAWMAKERS SEEK CHARGES
A Tennessee legislative committee is seeking perjury charges against two former
top aides to former University of Tennessee President John Shumaker, one of
whom had ties to higher education in Kentucky.
Shumaker was president of the University of Louisville before taking the job
at Tennessee. His chief of staff at Tennessee was Cathy Cole, who was a prominent
staff member at the old Kentucky Council on Higher Education in the 1980s.
Two Tennessee legislators said "there is a substantial basis for concluding"
that Cole and Steve Leonard violated state perjury law.
The legislators say Cole testified Sept. 4 that she was not involved in background
checks on Shumaker when he was a candidate for the UT presidency.
But they said that conflicted with Cole's statement March 21 in a deposition
for Shumaker's divorce proceedings when she said she was "directly involved"
in background checks on him.
Sen. Jerry Cooper, D-McMinn-ville, and Rep. Charles Curtiss, D-Sparta, cited
sworn testimony to the Fiscal Review Committee for the accusations. The co-chairmen
argued their case in a letter to prosecutors.
Leonard was executive vice president of UT until he resigned in September.
Cole's job has been eliminated by interim UT President Joe Johnson.
Johnson took over after Shumaker resigned in August because of questionable
ethics and lavish spending.
Cole declined comment. Leonard defended his testimony.
Knox County District Attorney General Randy Nichols is conducting a separate
review with the Tennessee Bureau of Investigation to determine whether criminal
charges should be brought against Shumaker.
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