A memo from outgoing Gov. Matt Bevin's administration says Gov.-elect Andy Beshear faces a massive budget shortfall as he prepares to take office.
The memo from Bevin's budget director estimates the shortfall could exceed $1 billion over the next two years.
The memo says additional funding will be needed for pensions, corrections, Medicaid and employee health benefits.
The memo was sent to Beshear's transition team and state lawmakers.
Beshear takes office next Tuesday and will submit a two-year spending plan to the legislature early next year.