Kentucky faces more cuts and continued underinvestment in critical services in the next two-year state budget unless lawmakers generate additional revenue, as outlined in KCEP’s new comprehensive budget preview report.
A meager revenue forecast combined with the need to roll back deep budget cuts and pay down existing liabilities make for the most difficult budget lawmakers have faced in recent memory. The choice is either to reinvest in Kentucky’s schools, health, communities and economy by generating additional revenue, or further retrench and keep the state on the course to a lower quality of life.
The new budget will be built on weak revenue growth due to a still-sluggish economy; slowdown in revenue from corporate, coal severance and cigarette taxes; and the outdated and inadequate state tax system. Kentucky also has less one-time money available to balance the budget than it has used in recent years, and federal funding to the state is being cut.
While revenue is scarce, budget pressures are growing. There is great need to ease the pain from 13 rounds of cuts that have slashed $1.6 billion from the state budget in the last six years, fully address liabilities in the state employees’ and teachers’ retirement systems, give employees their first raise in five years and make investments in areas like early childhood education that could move Kentucky forward.
The report, “Reinvestment or Retrenchment? A Preview of the 2014-2016 Kentucky State Budget,” provides an overview of the challenges facing the services Kentuckians rely on; outlines the extensive cuts to education, health, human services and other areas that have been made to date; and tallies the revenue and other resources the General Assembly will have available when it crafts a new budget.