KY Policy Blog

PFM Report Uses Exaggerated Claims to Justify Harsh, Counterproductive Cuts

By Jason Bailey
August 28, 2017

The final report from the state’s pension consultant PFM uses exaggerated claims about the condition of all of the state’s pension plans to justify harsh and ultimately counterproductive cuts to retirees, current workers and future employees.

PFM bases its recommendations on claims that existing actuarial assumptions must be altered immediately and dramatically for all of the state’s pension plans. Those changes add $1.8 billion to employer contributions in 2019 above what they would otherwise be.  But while the depleted state of the Kentucky Employees Retirement System (KERS) non-hazardous plan merits read more

Five Things to Keep in Mind as College Students Head Back to School

By Ashley Spalding
August 23, 2017

In colleges across Kentucky, students are beginning their fall semester — some for the first time, some returning to complete a degree. Here are five things about higher education in our state to keep in mind as the new school year begins.

State budget cuts have continued

Kentucky ranks in the bottom 10 states in the nation for per-student higher education funding cuts since 2008, according to a recently released report. We are also 1 of 13 states that continued to cut over the past school year, while the majority read more

School Funding Challenges Remain as Students Return to Classrooms

By Ashley Spalding
August 16, 2017

The beginning of a new school year is often a time of excitement for kids, parents and educators. But it’s also a time state funding cuts and freezes to K-12 education may create difficulties for some school districts as they make decisions about what they can and cannot afford.

Kentucky’s K-12 funding cuts among the deepest

In last year’s report on K-12 funding by the Center on Budget and Policy Priorities, Kentucky continued its decline in national education funding rankings, sliding to third worst in the nation based on cuts read more

Four Added Concerns About Kentucky’s Fiscal Outlook

By Pam Thomas
August 4, 2017

The fact Kentucky has a severely underfunded pension system and that Gov. Matt Bevin plans to call a special session on the issue has been widely publicized.  So has the round after round of state budget cuts in recent years. On top of those challenges are added fiscal problems, made even clearer recently, that present a daunting picture for the commonwealth in 2018 and beyond.

Last week, the state budget director appeared before the Interim Joint Committee on Appropriations and Revenue to provide an overview of the fiscal year that read more

Continuing General Fund Erosion Is More Evidence of the Need to Clean Up Tax Code

By Anna Baumann
August 2, 2017

As a share of the economy, Kentucky’s General Fund is worse off today than before the last positive effort to clean up the tax code under the Kentucky Education Reform Act (KERA) took effect – 5.9 percent in 2017 compared to 6.4 percent in 1990 (see graph below). Due to the growing number and size of tax breaks in Kentucky’s tax code, General Fund revenue eroded relative to the economy for two decades after KERA and has largely stagnated since 2010. In fact, weak revenue growth in 2017 put the read more

Year-End Revenue Results Underscore Need for Right Actions on Tax Reform

By Anna Baumann
July 11, 2017

Kentucky ended the 2017 fiscal year with $138.5 million less in General Fund revenue than economists predicted would be collected. The shortfall puts slightly more pressure on investments in our schools, universities and community colleges, health and human services and other building blocks of Kentucky communities. And its details reinforce the need to generate more revenue in ways that will work.

Total General Fund receipts in FY 2017 totaled $10.5 billion. Receipts did grow compared to FY 2016 by $138.9 million (1.3 percent), but the forecast predicted twice as much read more

New Study Provides More Evidence Harsher Penalties Are Not Solution to State’s Drug Problems

By Ashley Spalding
July 11, 2017

At the same time our state is increasing criminal penalties for heroin, a new analysis further bolsters existing research showing such an approach is not an effective way to address Kentucky’s drug problems.

House Bill 333, which the Kentucky legislature passed earlier this year, increases penalties for low-level heroin and fentanyl trafficking — rolling back the drug sentencing reforms in 2011’s House Bill 463. The new law makes trafficking in heroin in less than 2 grams a Class C felony, with a 5 to 10 year sentence and no eligibility read more

Senate Health Care Repeal Bill a Drastic Step Backward for Kentucky’s Health

By Dustin Pugel
June 23, 2017

The Senate released the discussion draft of their bill yesterday to repeal the Affordable Care Act (ACA). If passed, the Senate proposal would be a terrible setback for the 1.4 million Kentuckians covered by Medicaid as well as all Kentuckians who benefit from the patient protections and assistance buying coverage contained in the ACA.

Nationally, the Congressional Budget Office (CBO) estimates that it would end coverage for 22 million Americans and drive up health care costs for nearly everyone else.

Effectively Ends Medicaid Expansion

Over 473,000 low-income Kentuckians have gained read more

Kentucky’s State Budget Unable to Compensate for Massive Cuts in Trump Budget

By Ashley Spalding
June 15, 2017

President Trump’s budget proposal dramatically shifts costs to states they will be unable to afford, as shown in reports released this week by the Center on Budget and Policy Priorities. At the national level the cuts mean states and localities would immediately need to come up with the equivalent of more than five percent of state General Fund budgets to maintain the programs the federal government is shedding. Because the proposed cuts grow over time, what states need to assume responsibility for will grow to the equivalent of 37 percent read more

Troubling Hints About Direction for Tax Reform

By Anna Baumann
June 8, 2017

We don’t know yet the specifics of a tax reform plan the governor wants the General Assembly to consider in a 2017 special session. But this week, in a letter sent to legislators indicating the session will be held sometime after Aug. 15, the governor said Kentucky can become “more competitive with surrounding states like Indiana and Tennessee by lowering or eliminating certain taxes.” Given the makeup of those two states’ tax systems, this language suggests a potentially harmful direction that involves lowering taxes for the wealthy and corporations and read more