FRANKFORT — Walloped by a series of financial blows, political leaders in Kentucky spent much of the past year looking for places to cut government spending, and as 2008 drew to a close, economists were warning of more misery ahead.

Gov. Steve Beshear originally whittled some $430 million out of the state budget in a move that affected a broad array of government services and even forced layoffs in some local governments and school districts. Then came news of additional shortfalls of $456 million in the general fund and $100 million in the road fund.

The financial woes were voted the top Kentucky story of 2008 by The Associated Press member newspapers and broadcasters. That was no surprise to Beshear, who has been forced to make broad cuts in government spending.

“Kentucky’s state budget has been the most pressing issue for me in my first year as governor,” he said. “My first directive has been to reduce state government spending because that’s what families are doing all across the commonwealth during this trying economy.”

Beshear, looking for ways to raise revenue to offset some of the nearly $1 billion in shortfalls, proposed in December raising the state’s cigarette tax to $1 a pack and to double the tax on snuff and other tobacco products. That move, which Beshear believes is politically acceptable to most Kentuckians, would generate $81 million this fiscal year and $144 million the next — not nearly enough to offset the revenue losses.

To achieve that, the Democratic governor proposed cutting an additional $147 million in spending and taking nearly $179 million from the state’s “rainy day” fund.

The financial problems edged out a number of other high-profile events that made news over the past 12 months. That includes the continuing legal battles over Kentucky’s death penalty, which took the No. 2 spot on the list of top stories.

A Kentucky case that questioned the legality of lethal injections made its way to the U.S. Supreme Court, which in April upheld the state’s method for putting inmates to death, refusing claims by defense attorneys that lethal injections were cruel and unusual punishment.

Some seven months later, in November, Marco Allen Chapman, a confessed child-killer who waived appeals in an effort to expedite his death sentence, was executed. It was Kentucky’s first execution in nine years.

Third on the list of top stories was the debate over whether Kentucky should legalize casinos. Beshear proposed amending the state’s constitution to allow casinos to open so that they could be taxed to generate some $500 million a year in revenue for the state.

After months of spirited discussions, the measure died in the General Assembly where lawmakers refused to vote to place a referendum on the ballot that would have allowed Kentucky voters to decide whether to lift a constitutional ban on casinos.

In politics, Kentucky voters turned out in record numbers to take part in a historic election that resulted in the nation’s first black president, Barack Obama, a Democrat from Illinois. However, Kentuckians threw their support not to Obama but to Arizona Republican John McCain. That election, in which U.S. Sen. Mitch McConnell was sent back to Washington, was the No. 4 story as voted by editors and broadcasters.

McConnell, the Senate Republican leader, had a scare from Democratic challenger Bruce Lunsford, a wealthy Louisville businessman and formidable opponent, but ended up winning the race handily.

A federal probe into bid-rigging in the Kentucky Transportation Cabinet took the No. 5 spot on the list. A grand jury indicted Kentucky road construction contractor Leonard Lawson, former state Transportation Secretary Bill Nighbert and Lawson aide Brian Russell Billings in September.

The charges — conspiracy, misapplication of property and obstruction of justice — were brought after a yearlong FBI probe into the awarding of $130 million in state highway construction contracts during Gov. Ernie Fletcher’s administration. The three men entered not guilty pleas. Their trial is set for April 28.

The death of filly Eight Bells at the Kentucky Derby made the list of top state stories at No. 6. The 3-year-old broke both of her front ankles moments after finishing second to Big Brown and was euthanized on the track at Churchill Downs. Her death sparked widespread cries for safety reforms across the thoroughbred industry and even some questions about whether the filly’s bloodlines emphasized speed at the expense of soundness.

A wind storm that swept through the state in September made the Top 10 list at No. 7. The remnants of Hurricane Ike hit the state with gusts of up to 75 mph, knocking out power to an estimated 600,000 customers across Kentucky. National Guardsmen were brought into Louisville, one of the hardest hit cities, to help remove debris and manage traffic. At least two deaths were blamed on the storm.

In western Kentucky, a gunman shot and killed five co-workers at a Henderson plastic plant in June and then killed himself. That tragic shooting was selected at the 8th biggest story in Kentucky for the year.

Investigators said the shooter had argued with his supervisor about not wearing safety goggles and about using his cell phone on the assembly line.

The slayings of three children and a violent sexual assault on their mother in Trigg County in October made the list of top stories at No. 9.

A grand jury indicted a Hopkinsville man, Kevin W. Dunlap, on three counts of murder, one count of attempted murder and four counts of kidnapping, as well as rape, burglary and evidence tampering following the deadly violence in the Roaring Spring community near the Fort Campbell Army post in southern Kentucky.

Rounding out the Top 10 stories of the year was a court case from Brandenburg that resulted in a Kentucky-based Ku Klux Klan group being ordered to pay $2.5 million in damages in a judgment that civil rights attorneys hope will bankrupt the chapter.

A jury in November ordered Imperial Klans of America grand wizard Ron Edwards and two former lieutenants to pay the money to a Latino teen severely beaten in 2006 by two Klan members.