KY Policy Blog

Taxing Groceries Not a Good Strategy for Kentucky

By Ashley Spalding
October 1, 2012

The recently released consultants’ report to the governor’s tax reform commission included the option of applying Kentucky’s sales tax to food for home consumption (i.e., groceries). While broadening the tax base is an important strategy to raise and sustain revenue, a tax on groceries would make Kentucky’s tax system less equitable. And because groceries are a shrinking portion of what people consume, it could worsen Kentucky’s long-term revenue problems.

Kentucky applied the sales tax to groceries until 1972 when it exempted them for tax fairness reasons. As a share of read more

Transitioning Adults to Postsecondary Education Crucial to Meeting Goals

By Ashley Spalding
September 24, 2012

Postsecondary education is increasingly recognized as an important means of improving the economy and increasing the financial well-being of individuals and families. But given Kentucky’s serious educational challenges, the state must start early in the education pipeline—including with a major focus on efforts that help adults obtain basic education, make the transition to higher education and then acquire a credential or degree.

Efforts to increase the percentage of adult education students who are transitioning to college are especially important given the low levels of education among adults in Kentucky, the read more

Pension Issue is Primarily a Revenue Challenge

By Jason Bailey
September 20, 2012

Over the last several years, much of the focus given to Kentucky’s pension system has been on ways to shift new employees into some version of a 401k-style retirement plan. But as a presentation to the state’s pension task force this week showed, that idea has little to nothing to do with the state’s main challenge on this issue: how to pay back the existing unfunded liability.

Consultants from the Pew and Arnold foundations presented preliminary information to the task force on the impact of various options for dealing with read more

Higher Education Helped in the Recession, but Doesn’t Guarantee a Good Job in Recovery

By Sean Litteral
September 13, 2012

Those with higher education fared better in the recession and are more likely to obtain the new jobs being created in the recovery. However, those new jobs tend to pay lower wages than the jobs that were eliminated during the downturn.

Thus while more education can help shield families from recession, the path to greater family economic security must also include policies that spur the creation of more good quality jobs.

A report released last month by the Georgetown Public Policy Institute highlights how the recession impacted those with different read more

State Cuts to Education Continue to Deepen

By Ashley Spalding
September 5, 2012

Kentucky is one of 35 states in which inflation-adjusted per student state funding for K-12 education is lower this school year than it was in 2008, according to a new report by the Center on Budget and Policy Priorities.

The report calculates that Kentucky’s core state funding for local schools has declined by 8.5 percent, or $399 per student, between 2008 and 2013. 26 states—including Kentucky—have deepened the already steep cuts to education over the last year. School funding per student in Kentucky decreased by 1.4 percent between fiscal years read more

Increase in Federal Minimum Wage Would Provide Much-Needed Boost to Kentucky Families

By Jason Bailey
August 14, 2012

An increase in the federal minimum wage to $9.80 an hour would raise wages in Kentucky by $606 million over the next three years and benefit one out of every four of the state’s workers, according to a new report by the Economic Policy Institute (EPI). Contrary to stereotypes, increasing the minimum wage would primarily benefit adults whose families depend on these jobs to make ends meet.

The report examines the impact of legislation introduced in both houses of Congress to incrementally raise the federal minimum wage from its current read more

Agenda to Reduce Taxes and Workers’ Rights No Path to Prosperity

By Jason Bailey
August 6, 2012

Hardly a month goes by without the release of another index supposedly ranking states on their economic competitiveness. One prominent such report comes from the American Legislative Exchange Council (ALEC), a controversial national corporate lobbying organization. But a new analysis by a University of Iowa economist shows that ALEC’s prescription of tax cuts for the wealthy and corporations, reductions in public services and curtailment of workers’ rights has no correlation with state prosperity.

Professor Peter Fisher, a leading expert on state economic development policy, looked at the economic performance of read more

Kentucky Job Growth Continues To Be Too Slow

By Jason Bailey
July 23, 2012

Kentucky added only 700 net jobs in June, again failing to produce enough jobs to make a real dent in the employment gap created by the recession. Kentucky needs to be adding 3,500 jobs a month in order to return to pre-recession unemployment rates within three years. Over the last three months, the state has been adding only 1,700 jobs a month on average.

There are clear ways for Congress to jumpstart employment growth if the will to act were there. It should be providing expanded aid to state and read more

Report’s Findings Suggest Kentucky’s Business Tax Incentives Not Very Cost-Effective Way to Create Jobs

By Jason Bailey
July 19, 2012

Put into context, the findings of a consulting group report to the Kentucky legislature suggest that state economic development incentive programs are not a very cost-effective way to create jobs—a result that is in line with other studies on this topic.

The report is the outgrowth of House Joint Resolution 5 in the 2011 Kentucky General Assembly, which required a study of the state’s incentives to attract business. Anderson Economic Group produced the report under contract with the legislature.

A challenge in determining whether incentive programs are cost-effective is the read more

Report Estimates Medicaid Expansion Could Actually Save Kentucky Money

By Jason Bailey
July 5, 2012

We previously reported (here and here) that the state will likely incur little cost associated with the expansion of Medicaid beginning in 2014 to around 300,000 Kentuckians. But in fact the expansion could actually save the state between $140 million and $828 million over the first six years of the law, according to a report by the Urban Institute and the Robert Wood Johnson Foundation.

The report estimates that the expansion of Medicaid to adults with incomes up to 138 percent of the federal poverty level will cost Kentucky $547 read more