KY Policy Blog

Proposed 401ks Cost More Than Kentucky’s Existing Pension Plans

By Jason Bailey
September 6, 2017

The 401k-type defined contribution (DC) plans proposed by PFM in their final report would cost more than Kentucky’s existing defined benefit (DB) plans, according to data from PFM itself and the systems’ actuaries. Under a switch, the state would be making bigger contributions for a plan that reduces the retirement security of its workers. That hardly makes it a solution to the state’s pension funding challenges.

The cost of the DC plan is higher in part because the existing pension plan for new employees is already inexpensive if funded on read more

Clawback of Cost of Living Adjustments Would Be Major Hit to Retiree Checks

By Jason Bailey
August 30, 2017

The Bevin administration’s consultant recommends a massive cut to many retirees’ incomes by rolling back past cost of living adjustments (COLAs) — a proposal that could reduce pension checks by as much as 32 percent.

The plan in PFM’s report would claw back COLAs earned between 1996 and 2012 for those receiving pensions in all of the plans, including state and local workers, teachers and police.  For Kentucky Retirement Systems (KRS) retirees, that means their checks could be as much as 32 percent smaller for those who retired before 1996 read more

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

Too Many Community College Students Are Hungry or Homeless

By Celena Snoddy
August 10, 2017

While community college is typically thought of as an affordable option for earning a degree, a recent report shows this is often not the case. Too many community college students do not have consistent access to food or stable housing, which makes it difficult for them to be academically successful. These issues likely contribute to Kentucky’s low community college graduation rates as well as achievement gaps for low-income and underrepresented minority students.

The report describes findings from a survey of basic needs insecurity (i.e. food and housing) among community college 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