KY Policy Blog

New Tax Breaks Are Not Free

By Jason Bailey
February 21, 2017

This General Assembly, like prior ones, includes a slew of bills that would create new or expand existing tax breaks for a wide variety of people, businesses and activities. While most such bills typically fail to pass, some usually do each session — diminishing the revenue Kentucky has to invest in schools, healthcare, infrastructure and other needs. As of the bill filing deadline last week, legislators had introduced about 40 tax break bills.

Though there are rare exceptions, state tax breaks are often ineffective strategies to achieve particular policy goals. read more

Questions and Answers on Performance Funding for Higher Education

By Ashley Spalding
February 20, 2017

The theory behind performance based funding for higher education in Kentucky is that tying some funding for the state’s public universities and community colleges to outcomes could incentivize the institutions to graduate more students. While it is a relatively simple concept, the details of the performance funding bill Senate Bill 153 are more complicated. Here are some of the key questions and answers on the topic.

Where does the funding come from?

While performance funding is often tied to new money, in this case it is not. In 2018, the read more

How Would the Performance Funding Proposal Impact Low-Income, Minority and Academically Underprepared Students?

By Ashley Spalding
February 20, 2017

We have previously written about how while a performance model could potentially promote success for all Kentucky students, depending on how it is designed, it could instead result in unintended consequences that have a negative impact on low-income, minority, adult and academically underprepared students. The specific funding model proposed in Senate Bill 153 could do more to prevent these unintended outcomes.

Heavily Weighting Metrics for Low-income and Minority Students

A concern is  public universities may be incentivized to restrict admissions to only the most academically prepared students in order to read more

Kentucky’s Experience with High Risk Pool Shows Dangers of ACA Repeal

By Dustin Pugel
February 17, 2017

Repeal of the Affordable Care Act (ACA) means going back in time to before the law existed or to some as yet undefined “replacement” plan. Some in favor of repeal suggest a new plan should contain what are called high risk pools, including in the recent “Obamacare Repeal and Replace” policy brief circulated by Republican lawmakers in Washington. But evidence from Kentucky’s former high risk pool called Kentucky Access shows how such ideas fall short of the protections and coverage in the ACA.

What is a High Risk Pool?

Kentucky read more

Many Kentuckians Work in Bad Jobs

By Jason Bailey
February 17, 2017

Anecdotal claims are often made that many good jobs are available across the state but Kentucky lacks a workforce skilled and responsible enough to fill those jobs. But the fact is our economy is comprised of many jobs that offer low wages and have few skill requirements — jobs that Kentuckians are working every day.

The Education and Workforce Development Cabinet released its updated occupational outlook report for the years 2014 to 2024 last summer, and recently created a new interactive tool to share related data. Rather than lots of read more

What’s In the Criminal Justice Reform Bill, and What’s Not

By Ashley Spalding
February 15, 2017

Senate Bill 120, the bill coming out of the state’s Criminal Justice Policy Assessment Council (CJPAC), proposes some positive steps to address barriers to successful reentry often experienced by former offenders when they are released from jail or prison. Here’s an overview of what is and is not in the bill.

The bill includes:

Second chances for workers with records

SB 120 includes licensing reforms that would increase employment opportunities for workers with records by making it possible for them to receive state occupational licenses in some circumstances. Currently the read more

Harsher Criminal Penalties Not a Proven Way to Address Heroin Problem

By Ashley Spalding
February 15, 2017

We all want to see Kentucky address its devastating drug problems. The issue touches individuals and families from all walks of life across Kentucky, and too many of us have friends, relatives and neighbors who have been hurt in some way by drug addiction.

Senate Bill 14, which passed the Senate yesterday, increases criminal penalties for possession of heroin and fentanyl, drugs that are most frequently involved in overdose deaths, as a solution to these problems . This approach would lock up more Kentuckians struggling with addiction for longer periods read more

Not Yet to Full Economic Recovery

By Jason Bailey
February 13, 2017

The economy as a whole has been slowly improving and Kentucky’s unemployment rate has fallen from 10.9 percent in June 2009 to 4.8 percent now — the lowest rate since 2001. While the low unemployment rate suggests an economy almost fully recovered, another measure of employment shows Kentucky still has a ways to go.

The unemployment rate only counts people who have sought work in the last four weeks – not the individuals who, because of the depth of the job losses in the Great Recession and a slow and read more

No Need to Overinflate Pension Liabilities

By Jason Bailey
February 10, 2017

Lately the governor is saying Kentucky’s unfunded pension liabilities are not the $33 billion reported by the systems’ actuaries, but a much larger $82 billion. That estimate is based on unrealistically low assumptions about the future rate of return on investments.

The size of pension liabilities and amount employers should contribute each year depend on assumptions about future employee growth, retirement, mortality and more. One key assumption is what the average annual rate of return on investments will be. Most pension plans use an assumption of between 7 and 8 read more

Will More Revenue from Tax Reform Be Real and Sustaining?

By Jason Bailey
February 9, 2017

Governor Bevin suggested in his State of the Commonwealth speech that his tax plan will generate more revenue to help Kentucky pay down its large unfunded pension liabilities. Kentucky needs more revenue to honor those debts and make the public investments that build thriving communities. But there are big questions about what he means by more revenue and whether the kind of tax plan he is talking about will do the job.

There are three ways more money could come up in these discussions, only one of which would actually  read more