Gov. Steve Beshear called for a 70-cent cigarette tax increase and for state workers to take three unpaid furlough days by June 30 to help cover a projected $456 million state budget shortfall.

He would use the Rainy Day Fund to balance this year’s budget while using the $144 million in new revenues generated by the cigarette tax and a doubling of other tobacco taxes to replace those funds next year. The plan would exempt the public schools funding formula, protect prisons and Medicaid, and restrict reductions to universities to 2 percent. Non-SEEK funding for public schools – for family resource centers, textbooks and extended services – would be cut 2 percent.

The plan doubles taxes on smokeless tobacco products, which together with raising the cigarette tax to $1 would generate $81.5 million this year, including one-time inventory taxes, and $144 million next year. Some of that would be used to replace the $178.9 million he proposes taking out of the Rainy Day Fund — which has already been budgeted for next year.

The rest would be covered by spending cuts of $147.1 million, moving $40 million within the budget and saving $8 million through employee furloughs. Without new revenue, agencies would be cut by as much as 11 to 17 percent on top of cuts they endured last year when the budget was cut $430 million.

“I find that untenable and I find that unacceptable,” Beshear said.

Without new revenue, Beshear said, “significant” layoffs might be necessary; universities might implement enrollment caps and cut scholarships; there would be fewer beds for convicts; and health care for the disabled and mentally handicapped would be cut.

Beshear said among the services exempted is the Communities at Oakwood in Somerset, a residential facility for mentally handicapped persons. Not protected are constitutional offices and the state’s prosecutors who plan to furlough staff and perhaps close offices for a few days. Beshear said some agencies could still lay off employees to enact budget cuts.

Beshear previously briefed legislative leaders, including Senate President David Williams, R-Burkesville. The General Assembly would have to approve the tax increases and employee furloughs.

“I find willingness on the part of everybody to come together and find common ground,” Beshear said.

In a written statement, Williams said: “As of this date, we have only received a press release setting out any detail of the Governor’s proposal. We look forward to viewing the proposed.”

Sen. Charlie Borders, R-Grayson, who chairs the Senate budget committee, said he’s pleased Beshear spared education, “the kingpin that drives everything.” He said the governor showed leadership in proposing a plan that the legislature can use as a “starting point,” but he said it’s too early to criticize or endorse the plan – or the proposed increases on tobacco taxes.

The Republican Senate last spring refused to go along with a Democratic House plan to increase cigarette taxes by 25 cents, but Williams has been coy recently about whether the Senate might support an increase to cover the current budget shortfall.

Beshear is “hopeful we can finalize this plan sometime in January,” whether in special or regular session, but he said “time is of the essence,” because only six months remain in the fiscal year.

In return for cutting higher education only 2 percent, Beshear asked university presidents “to find ways to hold college tuition down — particularly in these tough economic times.”

Morehead State University President Wayne Andrews said the proposed 2 percent cut is “a better position than I thought we’d be in and I appreciate the governor’s leadership in trying to find a plan without doing a significant amount of damage to education and higher education.”

That doesn’t mean tuition won’t rise. Andrews said university presidents are mindful that it can’t keep rising as quickly as it has for several years but they have fixed costs, which must be met.

“It’s not going to be possible to have no tuition increase,” Andrews said. “But I will do everything I can to hold tuition down.”

Beshear plans a series of public meetings across the state to drum up support, explain what his options were and the consequences of deeper cuts.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. He can be reached by e-mail at rellis@cnhi.com.