FRANKFORT, KY. - Gov. Steve Beshear proposed an austere state budget Tuesday that he conceded is "inadequate for the needs of our people" - cutting funding for most state agencies by 8.4 percent while protecting some priority areas.

The cuts, coming on top of others made during Beshear's first term, will likely mean delays in services, the loss of federal matching funds, the possible closing of some state offices and perhaps even limited layoffs of state workers.

"We should be making substantial investments in our physical and intellectual infrastructure to bring transformational change to our state. This budget does not allow us to do enough of that," the governor said in his 39-minute budget address Tuesday night before a joint legislative session in the House chamber.

"Instead, it requires painful cuts that may well force us to retreat on some core services and that risk jeopardizing progress we've made over decades in education," he said.