Frankfort — The chairmen of the House and Senate budget committees said Thursday that lawmakers should resist cutting education when putting together a state spending plan for the next two years amid sluggish revenues.

"When we do talk about any potential cuts, the last place that we can afford to cut is education," said Sen. Charlie Borders, R-Grayson, chairman of the Senate Appropriations and Revenue Committee.

Rep. Harry Moberly, D-Richmond, who heads the House Appropriations and Revenue Committee, warned that the most damaging cuts for Kentucky would be reductions in the formula for funding public elementary and secondary schools.

"I'm going to do everything I can to try to prevent that from happening," he said. "Because when you do that, you get to the very base of our educational system."

The lawmakers spoke at a legislative workshop sponsored by the Kentucky Press Association, The Associated Press and the National Conference of Editorial Writers.

Their comments came amid the grim backdrop of projected budget shortfalls for the current budget year and in the fiscal year that begins in July.

"We're in a very serious budget situation," Moberly said.

Gov. Steve Beshear, who took office last month, recently announced spending cuts for various state agencies that whittled about $78 million from the more than $430 million expected shortfall in the current budget year. He also authorized the state to use about $145 million left over from the previous fiscal year and about $42 million in unbudgeted or excess funds found throughout state government to help cover the gap.

Borders said Thursday that the state has endured tough fiscal times before, and predicted lawmakers will work through the current financial pinch. "Are we in tough times? Yes," he said. "Can we make it through this year in the black? Yes."

Moberly said the national economic downturn is a main cause of Kentucky's fiscal woes.

Beshear has said a larger problem looms in the coming two years. He warns that state revenue next year is expected to fall short of the current spending levels by about $525 million.

In discussing the shortfall's severity, Beshear told the same workshop Thursday: "I sort of had the impression that the cupboard was going to be bare. I just didn't know that the cupboard was going to be gone, too."

On Thursday, the state budget office said general fund tax receipts in December were down about $53 million, or nearly 6 percent, from the same month a year ago. For the first half of the fiscal year, however, revenues were down by $16.1 million, or 0.4 percent, from a year ago.

Beshear said that putting together a slimmer state budget offered "no good choices. There are bad choices, and there are worse choices."

Beshear presents his budget outline to the General Assembly late this month.

He said that providing prescription drug assistance to eligible seniors and improving early childhood education remain priorities for him.

He also said that education must continue to make progress.

"I'm determined that this state is not going to go backward during these next two years," Beshear said.

Beshear acknowledged the possibility of tuition hikes at public universities that are making cuts as part of the recent budget reductions and face future budget uncertainties. The governor said that will increase demand for needs-based scholarships, and the state will need to respond.

Meanwhile, Borders and Moberly differed on another overriding issue facing lawmakers that has potential revenue implications — casino gambling.

Beshear is expected to urge lawmakers to approve a ballot measure letting Kentucky voters decide whether to amend the state constitution to legalize casino gambling.

Moberly said that if the referendum won voter approval in November, the state could receive an infusion of $400 million to $500 million in extra revenue from casino licenses in the second year of the next two-year budget.

Borders, a casino gambling critic, likened casinos to "a giant suction cup" that would drain huge amounts of money from the Kentucky economy.

"I just don't think we can gamble on the future of Kentucky," he said. "When we invest in education, that's not a gamble."







Copyright 2008 The Associated Press.