KY Policy Blog

Diversion of Lottery Funds Undermines College Affordability

By Dustin Pugel
January 6, 2016

According to law, 55 percent of lottery profits are supposed to pay for need-based scholarships (after $3 million is given to literacy programs). For years, though, millions of scholarship dollars have been diverted away from the College Access Program and the Kentucky Tuition Grant toward other priorities. The problem has worsened since 2014, and has received media attention. Without action in this year’s session, funds will likely continue to be taken from students who need them the most.


KY Medicaid infographic read more

Eastern Kentucky, Veterans Affairs Workers Benefiting From Raised Minimum Wage for State Workers

By Dustin Pugel
December 7, 2015

More than 800 Kentucky workers have benefited across the Commonwealth because of the executive order raising the minimum wage for state workers and contractors signed last summer by outgoing Gov. Steve Beshear.

In July, Gov. Beshear raised the minimum pay for state workers to $10.10 an hour and the tipped minimum wage to $4.90 an hour. Additionally, Beshear required those who contract with state government to pay a $10.10 minimum wage to their employees, although such measures wouldn’t take effect until contracts are renewed.

There are currently 68 counties with read more

Raising Minimum Wage Would Reduce Spending on Medicaid

By Dustin Pugel
December 4, 2015

Those advocating to scale back Kentucky’s highly-successful Medicaid expansion cite a concern about its cost to the state. One way to help buffer costs would be to raise the minimum wage in Kentucky to $10.10 per hour, which would reduce the state’s spending on Medicaid by an estimated $34 million each year according to research by the Center for American Progress.

An increase of the minimum wage to $10.10 would directly impact an estimated 304,000 Kentucky workers, 16,700 of whom would see their earnings increase to the point that they read more

Shutting Down Kynect Would Take Money From Other Important Priorities

By Kenny Colston
November 23, 2015

According to the Cabinet for Health and Family Services, it will cost at least $23 million to dismantle Kynect, the state’s insurance marketplace. Using those funds to end the program would mean taking money from other important priorities.

Saving Kynect FINAL

Click to enlarge infographic read more

New Report Shows Kentucky Child Care Assistance Continues to Fall Short

By Dustin Pugel
October 30, 2015

Kentucky’s Child Care Assistance Program (CCAP) has one of the lowest income eligibility thresholds and has among the highest co-pays for parents among state child care subsidy programs, according to the annual child care report recently released by the National Women’s Law Center (NWLC). The report shows while nationally child care assistance is improving, Kentucky’s program is still weak.

The report assesses all 50 states’ child care programs based on their income eligibility limits, waiting lists, parent co-payments, reimbursement rates to providers and how much leeway parents have when looking read more

Even Big Cuts to New Teachers’ Pensions Would Do Little to Address System’s Funding Challenge

By Jason Bailey
October 27, 2015

Even if the state were to massively cut pension benefits for new teachers, it wouldn’t result in meaningful savings to the teachers’ retirement system over the 30 year period needed to pay down its unfunded liability, according to information provided to the system’s funding work group.

Thus the state could deeply reduce retirement security for new teachers through benefit cuts — and drive up the challenge of attracting and retaining good teachers — without making a real dent in the serious financial problem now facing Kentucky. Cuts to new teachers’ read more

Pension Needs Far Exceed Likely Revenue Growth in 2017

By Jason Bailey
August 25, 2015

The state needs to find $580 million more to make its actuarially required General Fund contributions to pension plans in the first year of the next budget, according to information shared with the Public Pension Oversight Board yesterday. But the state is currently expecting only $278 million in new General Fund revenue that same year — or less than half of what it needs for pensions alone — according to a recent draft estimate from the state’s Consensus Forecasting Group.

Presentations from the state budget director and retirement system officials read more

Despite Good Growth in 2015, Erosion Still Hurting Revenue

By Anna Baumann
August 3, 2015

The good news is Kentucky’s economy grew faster in budget year 2015, and tax revenue grew with it — by $505 million, or 5.3 percent, compared to budget year 2014. Individual income growth, high corporate profits, increases in consumer spending and a strong stock market contributed to the new revenue.

Nominally, individual income taxes grew the most, by $320 million (8.5 percent). Relatively, corporate income taxes grew the most by 11.2 percent ($53 million). The sales tax also grew by $136 million, or 4.4 percent.

The bad news is erosion read more

Road Fund Helped by 2015 Fix but Still Feeling Funding Challenges

By Anna Baumann
July 10, 2015

Kentucky ended budget year 2015 with a $20 million shortfall in Road Fund receipts, meaning slightly less money has come in than what was budgeted to invest in and maintain our transportation network.

Drops in the average wholesale price of gasoline — to which Kentucky’s gas tax is tied — are largely to blame. Taken together, all other Road Fund revenue was essentially flat with 0.3 percent growth, but gas tax receipts fell by 4.0 percent compared to budget year 2014. In dollars, the gas tax generated $35.9 million less read more

Year-End Revenues Highlight Importance of Individual Income Tax

By Jason Bailey
July 10, 2015

Kentucky ended its budget year with General Fund revenues $165.4 million more than anticipated, equaling growth of 5.3 percent from the year before. The individual income tax is the main source of this bit of good news because of its ability to generate revenue from wealthier individuals whose incomes have soared in recent years.

For the year, individual income tax receipts grew 8.5 percent compared to 2014, meaning all other revenue grew by only 3.2 percent. Sixty-three percent of total net new revenue for the year was from the individual read more