KY Policy Blog

What Are Taxes For?

By Anna Baumann
April 18, 2017

Across the commonwealth, Kentuckians are filing their taxes this week; and many are wondering if and how the Governor’s intention to do tax reform this year will impact what they pay in the future. The principles of good tax reform are clear (that it generates new revenue to invest in our communities in a fair and reliable way). Tax Day is a good time to remember what our contributions pay for, and why we should make sure that everyone is chipping in.

Through local, state and federal governments, tax dollars read more

New Version of Drug Bill Would Have Serious Consequences for Addicts and Criminal Justice System

By Ashley Spalding
March 30, 2017

A new version of House Bill 333 passed the Senate Judiciary committee late last night. The bill contains very consequential changes for Kentuckians struggling with addiction, as well as the state’s criminal justice system.

An earlier version of HB 333 increased penalties for fentanyl trafficking in very small amounts — any amount under two grams. However, these penalties would not apply if a person could prove that he/she had a substance abuse problem at the time of the offense. This provision was important because the state’s definition of trafficking is read more

House Health Repeal Would Shift $16 Billion in Costs to the Kentucky State Budget

By Jason Bailey
March 22, 2017

The House Republican plan to repeal and replace the Affordable Care Act (ACA), known as the American Health Care Act (AHCA), would cut federal funding for Medicaid in Kentucky by $16 billion over 10 years, according to an analysis by the Urban Institute. Making up that shortfall would require an increase in state Medicaid spending in Kentucky that would be bigger than all but one other state.

Cuts to Medicaid in the AHCA come in two ways. First, it would require Kentucky to spend approximately three times more than under read more

Trump Budget Eliminations Would Be Major Hit to Kentucky

By Jason Bailey
March 21, 2017

President Trump’s proposed budget would be a major hit to the investments that benefit Kentucky’s communities, as federal dollars play a substantial role in our state’s budget and economy. His budget would completely eliminate programs that provided more than $190 million in federal funding to Kentucky in 2016, according to an analysis from Federal Funds Information for States.

Those eliminations alone amount to nearly nine percent of all discretionary federal funding to the state. On top of those eliminations, the president’s budget would reduce funding for a wide range of read more

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

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