KRS 48.130: Budget reduction plan for revenue shortfall of five percent or less to be

included in each enacted branch budget bill -- Shortfalls over five percent

require legislative action.

(1) The General Assembly shall include in each enacted branch bud get bill a budget

reduction plan for a revenue shortfall in the general fund or road fund of five

percent (5%) or less. The budget reduction plan shall direct how budget reductions

shall be implemented if there is a revenue shortfall of five percent (5%) or less.

(2) A layoff of state employees in the executive branch under the budget reduction plan

enacted by the General Assembly shall comply with the provisions of KRS

18A.113.

(3) Any revenue shortfall in the general fund or road fund of greater than five percent

(5%) shall require action by the General Assembly.

(4) Upon the issuance of an official revenue estimate by the consensus forecasting

group reflecting a revenue shortfall in the general fund or road fund, or upon the

existence of an actual revenue shortfall in the general fund or road fund at the close

of a fiscal year as determined by the Office of State Budget Director, the Office of

State Budget Director shall notify all branches of government. If the revenue

shortfall is five percent (5%) or less, the following actions shall be taken:

(a) The unappropriated balance of funds in the surplus accounts of the general

fund or road fund shall first be used to meet the shortfalls in those respective

funds; and

(b) If the amounts described in paragraph ( a) of this subsection are insufficient to

address the revenue shortfall, the enacted budget reduction plan included in

each branch budget bill shall be implemented.

(5) The budget reduction plan for each branch of government may provide that the

annual increment granted state employees under KRS 18A.355 shall be reduced as

provided by KRS 18A.355. Any reduction of the annual increment shall be uniform

for all employees.

(6) No budget reduction action shall be taken by any branch head in excess of the

actual or projected deficit.

(7) If general fund or road fund tax receipts increase over the revenues estimated in the

official revenue estimate that resulted in reductions, then services may be restored

in the reverse order of the reduced services.