KY Policy Blog

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

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

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

Those at the Top Would Get More Tax Breaks, Investments Would Suffer from Shift to Consumption Taxes

By Anna Baumann
December 9, 2016

The details of Governor Bevin’s study on tax reform are unknown, but there are indications the administration intends to begin shifting Kentucky away from income taxes towards sales taxes as suggested by involvement from the out-of-state architect of Kansas’s tax shift, as well as the Governor’s own repeated preference for this approach. Kentuckians should be concerned that such a proposal will cut taxes at the top, require low- and middle-income families to compensate and leave us with less to invest in our schools, infrastructure, services for elderly and vulnerable Kentuckians read more

Kentucky Should Not Follow Kansas Down the Income Tax Cutting Road

By Anna Baumann
November 28, 2016

Four years after Kansas began its “real live experiment” cutting taxes for wealthy and powerful interests, the damaging consequences – including a deeply underfunded education system, college tuition hikes, crumbling roads and bridges and three credit rating downgrades – provide a timely warning for Kentucky: this is not a path we should go down.

And yet the hints our leaders have provided about the kind of tax changes they might push for, as well as outside influence from defenders of trickle-down economics, raise concerns there could be attempts to follow read more

Closing Tax Breaks at the Top Will Generate Needed Revenue, Not Cause Millionaire Tax Flight

By Micah Johnson
October 27, 2016

A study recently published in the American Sociological Review validates efforts to strengthen investments in education, health and other key areas by cleaning up tax breaks for those at the top. The finding – that millionaires are unlikely to respond to tax increases by moving – is important for Kentucky, where our upside-down tax code (it asks the least of those with the most) has led to deeply underfunded investments.

Millionaires Are Less Likely to Move

The Stanford University authors of “Millionaire Migration and Taxation of the Elite: Evidence from read more

Dealing with the Risks of Public-Private Partnerships

By Gayle Bartilow
October 20, 2016

While cleaning up tax breaks is the best way Kentucky can generate more revenue for needed investments in infrastructure, last year the legislature streamlined the process of contracting with private entities for funding. HB 309, passed in the 2016 session of the Kentucky General Assembly, gives state and local governments greater flexibility in securing public-private partnerships (P3s) which enlist private investors for the financing, construction, operation, and/or maintenance of infrastructure projects such as highways, bridges, parks and sidewalks.

While the notion of well-financed investors may make P3s sound enticing, there read more