KY Policy Blog

What Are Taxes For?

By Ashley Spalding
April 13, 2012

Tax Day is an important time for Kentuckians to consider the role of government in our state and nation. Taxes are a critical tool for doing things together that we cannot do alone. They support investment in education, health care, infrastructure, social services and other public structures essential for the common good in Kentucky.

These days, taxes are the subject of great controversy. But the investments paid for by tax dollars play a unique role in: advancing economic development; contributing to improved health and safety; creating educated workers and citizens; read more

Decline of TANF Caseloads Not the Result of Decreasing Poverty

By Ashley Spalding
April 6, 2012

Caseloads for Temporary Assistance for Needy Families (TANF), a safety net program designed to help families facing economic hardship meet basic needs, have declined sharply since 1995. Some policymakers have cited this decline as proof of the success of the 1996 welfare reform law.

However, a new report from the Center on Budget and Policy Priorities (CBPP) finds that these decreases in TANF enrollments nationwide were actually accompanied by overall increases in poverty.1 According to the report, TANF enrollments decreased 58 percent between 1995 and 2010, but the number of read more

Budget Agreement Affirms Deep Cuts to Core Investments

By Ashley Spalding
April 5, 2012

The 2012-2014 budget bill that passed both the House and Senate late last week is—like the budgets previously proposed this year by the Governor, House and Senate—based primarily on cuts. These cuts will further strain the state’s essential programs and services and prevent critical investments in Kentucky’s future.

The budget bill generally upholds the cuts to 2012 funding levels made in the Governor’s budget, which include:

Across state government: 8.4% Universities and community college system: 6.4% Kentucky Educational Television, libraries and archives, career and technical education: 4.2% Public safety including read more

Report Highlights Kentucky’s Need for More Progressive Income Tax

By Jason Bailey
April 4, 2012

A report released today by the Center on Budget and Policy Priorities (CBPP) shows that income taxes for Kentucky families slightly above the poverty line are among the highest in the nation for that income group.

The report says that in 2011 a two-parent family of four in Kentucky with income of only $28,773 (25 percent above the poverty line) paid $1,021 in state income taxes, an amount higher than any other state.

This dubious distinction is because the legislature has been unwilling to comprehensively reform its income tax to read more

The Benefits of Expanded Pre-School

By Jason Bailey
March 28, 2012

In its final days of negotiating a new budget, a sticking point between the House and the Senate is whether to include new dollars for the expansion of pre-school. The governor had proposed $15 million in 2014 for 4,400 new preschool slots for four year-olds, and the House put in $7.5 million for half that many openings. However, the Senate included no new money for pre-school.

Pre-school is an effective long-term economic development strategy. Economist Timothy Bartik examined the economic impact of universal pre-school programs and found that every $1 read more

Legislation Requiring Government-Issued ID Could Deny Public Benefits to Eligible Recipients

By Ashley Spalding
March 20, 2012

Senate Bill 118, which passed the Senate yesterday, would require applicants for all public benefits to provide proof of lawful presence in the United States. While the bill’s proponents say it is needed to bar illegal immigrants from state and federal public benefit programs, the legislation instead threatens benefits for citizens most in need of assistance, adds costs to the state and promotes inaccurate stereotypes about immigrants.

A substantial number of U.S. citizens do not have government-issued identification that proves citizenship—particularly those who are low-income, minority and elderly. One study read more

Blue Ribbon Commission on Tax Reform Launches Website

By Ashley Spalding
March 8, 2012

The Blue Ribbon Commission on Tax Reform launched a website this week to provide information about the commission process and ways for everyday Kentuckians to get involved. The commission has been tasked with recommending changes to Kentucky’s tax code by mid-November, after studying the state tax system and reviewing input from the public and interested parties.

The website includes the schedule of commission meetings (the first was held on Tuesday), which are open to the public:

Public Meeting Schedule

(All times are local)

Tuesday, March 6, 2012, 12:30-3:30 p.m. Transportation read more

A Decade of Erosion in Employer-Sponsored Health Insurance in Kentucky

By Ashley Spalding
February 28, 2012

According to a new report from the Economic Policy Institute (EPI), 200,000 fewer non-elderly Kentuckians had health insurance through an employer in 2010 than in 2000. The report finds that employer-sponsored insurance declined 9.3 percentage points over that period. Only 58.7 percent of Kentuckians under age 65 had this type of coverage in 2010.

The EPI report describes how, at the national level, those with lower levels of education and lower wages are less likely to have health insurance through an employer—or be insured at all.1 According to the report, read more

Tax Expenditures Big Cause of Budget Problems, but Some Legislators Want More

By Jason Bailey
February 24, 2012

There are three main reasons that the budget the legislature is now considering includes so many cuts. First, the economy is still struggling. Second, federal recovery-related financial assistance to the states is gone. And third, Kentucky’s tax system needs to be reformed. One reason for the third problem is that the General Assembly typically puts in place new “tax expenditures” every time it meets.

Tax expenditures are special tax preferences, rates or exemptions that benefit particular groups, industries or activities. Just like spending on the budget, they are a way read more

Faster Job Growth is Encouraging, but Kentucky Still Has Long Way to Go

By Jason Bailey
February 17, 2012

Job growth in Kentucky picked up in the last three months of 2011, as the state added 15,800 jobs. At the depths of the recession, Kentucky had lost 117,700 jobs. Job creation since the recovery began has reduced that gap, but the state still has 60,200 fewer jobs than before the recession hit.

In addition, the state’s real jobs deficit is even bigger once you take into account continued population growth. Kentucky needed to create an additional 57,400 jobs over the last four years to keep up with the ongoing read more