KY Policy Blog

Budget Cuts Lead to Job Losses

By Jason Bailey
June 8, 2012

News of layoffs at the University of Kentucky follows stories of pending job loss at the Fayette County health department. Both announcements can be linked to the 11 rounds of cuts the legislature has made to the state budget, which have reduced funding for many state functions by 15-30 percent or more.

Job growth in the economy remains slow, and budget cuts at all levels are making matters worse. Those cuts are resulting in the direct elimination of jobs—both through layoffs and by agencies and organizations not hiring for open read more

Senior Tax Breaks Don’t Attract Migrants

By Jason Bailey
June 1, 2012

Those arguing for state income tax cuts often claim that such cuts will result in the relocation of large numbers of people from other states, but the economic evidence simply doesn’t support those claims. As a recent survey of the research showed, people don’t migrate much in general, and those that move do so largely for family reasons or because they are attracted by quality of life, housing costs, job opportunities or weather—not taxes.

One variant on this claim is that tax cuts for seniors will make a state a read more

Kentucky’s Adult Education Challenge

By Jason Bailey
April 30, 2012

Education cannot solve all of our economic problems, as the many college-educated young people now unemployed and underemployed can attest. But low levels of educational attainment are an important reason for Kentucky’s economic challenges. A more skilled and educated citizenry is critical to building a Kentucky economy and society that can flourish.

While policy discussions of education often focus on children and traditional-age college students, Kentucky adults ages 25-54 face severe gaps in college attainment that impede state progress and family well-being. Those adults will be participating in the workforce read more

What Are Taxes For?

By Ashley Spalding
April 13, 2012

Tax Day is an important time for Kentuckians to consider the role of government in our state and nation. Taxes are a critical tool for doing things together that we cannot do alone. They support investment in education, health care, infrastructure, social services and other public structures essential for the common good in Kentucky.

These days, taxes are the subject of great controversy. But the investments paid for by tax dollars play a unique role in: advancing economic development; contributing to improved health and safety; creating educated workers and citizens; read more

Budget Agreement Affirms Deep Cuts to Core Investments

By Ashley Spalding
April 5, 2012

The 2012-2014 budget bill that passed both the House and Senate late last week is—like the budgets previously proposed this year by the Governor, House and Senate—based primarily on cuts. These cuts will further strain the state’s essential programs and services and prevent critical investments in Kentucky’s future.

The budget bill generally upholds the cuts to 2012 funding levels made in the Governor’s budget, which include:

Across state government: 8.4% Universities and community college system: 6.4% Kentucky Educational Television, libraries and archives, career and technical education: 4.2% Public safety including read more

The Benefits of Expanded Pre-School

By Jason Bailey
March 28, 2012

In its final days of negotiating a new budget, a sticking point between the House and the Senate is whether to include new dollars for the expansion of pre-school. The governor had proposed $15 million in 2014 for 4,400 new preschool slots for four year-olds, and the House put in $7.5 million for half that many openings. However, the Senate included no new money for pre-school.

Pre-school is an effective long-term economic development strategy. Economist Timothy Bartik examined the economic impact of universal pre-school programs and found that every $1 read more

Blue Ribbon Commission on Tax Reform Launches Website

By Ashley Spalding
March 8, 2012

The Blue Ribbon Commission on Tax Reform launched a website this week to provide information about the commission process and ways for everyday Kentuckians to get involved. The commission has been tasked with recommending changes to Kentucky’s tax code by mid-November, after studying the state tax system and reviewing input from the public and interested parties.

The website includes the schedule of commission meetings (the first was held on Tuesday), which are open to the public:

Public Meeting Schedule

(All times are local)

Tuesday, March 6, 2012, 12:30-3:30 p.m. Transportation read more

Tax Expenditures Big Cause of Budget Problems, but Some Legislators Want More

By Jason Bailey
February 24, 2012

There are three main reasons that the budget the legislature is now considering includes so many cuts. First, the economy is still struggling. Second, federal recovery-related financial assistance to the states is gone. And third, Kentucky’s tax system needs to be reformed. One reason for the third problem is that the General Assembly typically puts in place new “tax expenditures” every time it meets.

Tax expenditures are special tax preferences, rates or exemptions that benefit particular groups, industries or activities. Just like spending on the budget, they are a way read more

Budget Would Further Reduce College Affordability

By Jason Bailey
January 25, 2012

Three stacks of books and large dollar stack.The barriers to affordable higher education–especially for low-income Kentuckians–will continue to grow under a budget that cuts funding to postsecondary institutions and limits need-based financial aid.

Budget Would Further Reduce College Affordability

The Governor’s budget includes cuts of 6.4 percent to higher education institutions. On top of previous cuts and because of rising enrollment, per student General Fund dollars for higher education institutions would be an estimated 22 percent lower next year than in 2008 under the plan (see figure below). More cuts would inevitably lead to tuition hikes on read more

State Releases More Pessimistic Revenue Forecast

By Jason Bailey
October 14, 2011

The official body that approves state revenue estimates released a preliminary forecast today that projects nearly $500 million less in General Fund revenue for the upcoming two-year budget than the draft forecast back in August. Troubling questions about the economic outlook are resulting in less optimistic estimates.

The new estimate suggests growth in the General Fund of only 1.8 percent in 2013 and 2.4 percent in 2014. That translates to revenue growth of $164 million in 2013 and $224 million in 2014.1

In addition to possibly weak revenues, costs will read more