State-Journal.com - State workers face furloughs, layoffs

Furloughs or layoffs are possible as the state sets to tackle its multi-million dollar budget deficit.

Other solutions could include a four-day work week.

“It’s a reality this time instead of something people are just hinting about,” said Lee Jackson, president of the Kentucky Association of State Employees.

“There is a very, very serious crisis when it comes to the budget and revenues.”

Gov. Steve Beshear said the state faces a deficit of $160 million this year and is planning additional budget cuts of 6 percent. He’s already cut $800 million since he took office.

According to the Associated Press, the state faces a shortfall of $464 million in the first year of the biennial budget and $781 million in the second year.

Appropriations and Revenue Committee Chairman Rick Rand said federal stimulus funds will help in the next fiscal year. After that, Rand said, Kentucky will have used up its allotment of stimulus money and could face the sharpest cuts yet.

“Luckily, next year we will have stimulus money,” Rand said. “It will soften the blow.”

Several state officials have said layoffs are likely if any further cuts are required.

Jackson says he’ll fight to avoid furloughs or layoffs with several alternatives. He says he wants to make sure the state is utilizing all the federal funds available, and front-line state workers should be consulted about areas where money can be saved.

A four-day workweek is another way of saving money, Jackson said, without hurting state employees.

Utah state government switched to a four-day workweek in 2008, with offices open from 7 a.m. to 6 p.m. on Monday to Thursday.

Rep. Carl Rollins, D-Midway, also said it will be harder to avoid layoffs or program cuts in the upcoming budget negotiations.

“This time, people are really going to feel the pain,” he said.

When it comes to eliminating programs or possible layoffs each agency should be examined individually, Rollins said.

“Cutting across the board is not a good way to do business,” he said.

A four-day workweek could also cut costs and still provide adequate services, Rollins said.

Furloughs have been ordered for state employees in Colorado, California, Hawaii and Maryland. More than 800 have been terminated in Iowa, almost 9,000 in New York and about 700 in Pennsylvania.

In addition to furloughs and layoffs, any further spending cuts will likely reduce services, said Sen. Julian Carroll, D-Frankfort. A constituent recently complained that his 4-year-old daughter’s pre-kindergarten speech therapy program had been eliminated, Carroll said.

“Obviously, those kind of programs and services are going to be reduced,” he said.

In addition to spending cuts, legislators say they’ll also look at ways to raise additional revenue, including taxes, fees and gambling – but some political leaders are sending mixed signals.

Carroll suggested that lawmakers could raise the cigarette tax again, but Rollins said he hasn’t seen any support for such a move.

“We just can’t keep going back to the same well every time,” Rollins said.

Beshear said last week he doesn’t favor any broad-based tax increases for fear they could push Kentucky deeper into recession. That sentiment extends into the Republican-controlled Senate.

“Now is not the time to raise taxes,” said state Sen. Damon Thayer, R-Georgetown. “I don’t sense any sentiment at all in the Senate to raise taxes.”

Asking local school districts to spend some of their reserve funds could also help bolster the state budget, Carroll said.

“We’ve used all our resources,” he said.

However, Rep. Derrick Graham, D-Frankfort, strongly disagreed – he teaches social studies at Frankfort High School.

“It’s out of the question,” he said. “It’s borrowing from Peter to pay Paul. It’s not a good policy to pursue.”

Another possibility would be raising fees for state services, Carroll said. Some fees have not kept pace with the cost of providing services, such as the application for a limousine license, he said.

It only costs the applicant $25 but includes an administrative hearing and a written ruling, Carroll said. It probably costs the state at least a $100 to review a limousine license application, he said.

Other possible candidates for increased fees include birth certificates and annual corporate reports, he said.

Rollins and Graham said they would examine fees to see if they are appropriate but would prefer tax modernization over imposing any new fees.

“There’s not a lot of sympathy for any new taxes right now,” Rollins said.

“We need to upgrade our tax structure to meet the needs of the 21^st century,” Graham said.

House Speaker Greg Stumbo said the tax structure needs to be revised.

“If we were running a business like we run government, we probably would be broke because we don’t re-examine and adapt our revenue sources to the changes in the economy,” Stumbo said.

But House GOP Whip David Floyd of Bardstown said tax reform is “a euphemism for tax increases on certain earners and not others.”

Rollins and Carroll said they would support plans to add video slot machines at horse tracks without a constitutional amendment.

The plan would generate up to $300 million upfront, Carroll said.

However, the plan died last year and a recent special election failed to break the Republican majority in the Senate.

Graham said he would prefer to put the gambling proposal on the ballot.

“I think the people should have a choice,” he said.

The Senate is expected to deal with a proposal that would put the gambling issue in the hands of Kentucky voters.

The Associated Press contributed to this report.