Henry Confirms Massive Budget Shortfall

Governor Henry has confirmed that the budget shortfall for the next fiscal year will be far more than the estimate of $300 million, possibly hitting $600 million.

Earlier this week, The McCarville Report Online reported Capitol sources as saying the shortfall could reach $500 million.

Henry said state agencies need to brace for cutbacks: "There are going to be some cuts, and it will be difficult, and it will be painful."

Henry said difficult decisions are ahead as legislators decide where to make the necessary reductions. The governor said he wants to protect education, health care and public safety from significant cuts and is hoping to avoid layoffs or furloughs for the state's 37,000 workers.

The $600 million shortfall estimate represents about 8 percent of the current budget and includes an estimated $310 million decline in state revenue for the fiscal year that begins July 1. It also includes more than $180 million of one-time revenue sources and carryover money used last year to balance this fiscal year's $7.1 billion budget, Henry said. The rest of the shortfall comes from declining federal money coming to the state, mostly for the Medicaid program.

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