KY Policy Blog

COVID-19 Downturn Is Hitting Certain Industries and Regions of the State Especially Hard

By Dustin Pugel
May 28, 2020

Kentucky lost 15.5% of its jobs in April due to the COVID-19 pandemic with industries like hotels, restaurants and manufacturing especially hard hit. Because urban areas tend to have more jobs in these sectors, they also had a higher rate of job loss than rural parts of the state. Continued and significantly expanded federal fiscal relief will be needed to address sinking state and local revenues, ensure individuals out of work can get by, prevent further job loss and shorten the recession.

COVID-19 job losses felt across all industries

Every read more

Kentucky’s Budget Faces Trouble Without More Federal Aid

By Jason Bailey
April 7, 2020

The severe economic downturn caused by the COVID-19 pandemic spells trouble for Kentucky’s budget. The state’s resources were already tight before the virus, but the resulting economic collapse will be a big hit to tax receipts while driving up state costs — threatening our ability to provide vital services, respond adequately to the public health threat and achieve economic recovery once restrictions are eventually lifted.

Two new federal laws begin to address the added strain state governments are facing, but the extent of the downturn will require ongoing and more read more

What’s in the CARES Act for Kentucky

By Jason Bailey
April 3, 2020
Congress has passed and the President has signed a new COVID-19 economic relief bill, the Coronavirus Aid, Relief and Security (CARES) Act. Here are some of its major provisions and what they mean for Kentucky. This blog will be updated as more information becomes available.

Expanded and increased unemployment benefits

One of the most significant components of CARES increases unemployment benefits by $600 a week for the next four months, fully paid for by the federal government. Kentucky’s average unemployment benefit is only a modest $380 a week currently. This read more

Understanding the Quasi Pension Funding Issue

By Jason Bailey
February 3, 2020

Over the last few days, attention has turned to whether Governor Beshear’s budget underfunds the main state worker pension system, the Kentucky Employees Retirement System (KERS) non-hazardous plan, in the amount contributed for quasi-governmental agencies. The level of contributions for the last two years, as well as the level under the governor’s proposal, technically provide less than the KRS board has requested. That will also be the case in the new budget that eventually passes unless additional revenue is generated or resources are freed up through more painful budget cuts. read more

What the Finally-Released Actuarial Analysis Tells Us About So-Called Pension Reform

By Jason Bailey
December 20, 2019

Today Governor Beshear released the actuarial analysis of the 2017 “Keeping the Promise” pension proposal that had been suppressed for the last two years. As expected and as we noted at the time, the report shows closing the existing plans and moving workers into 401k-style defined contribution (DC) plans would’ve cost more to give employees less. 

The report has lessons that should apply to Kentucky’s pension debate in the future.

Moving to 401ks costs more than keeping existing plans

A centerpiece of the plan was to move new employees in read more

Three Ways the New Quasi Alternative Is Better than the Governor’s Proposal

By Jason Bailey
July 16, 2019

A pension alternative sponsored by Rep. Joe Graviss protects employees, quasi-governmental organizations and the underfunded pension system in ways the governor’s proposed legislation does not. Here’s why the proposal, introduced as HB 2 in the special session, would work better than HB 1, the administration’s plan.

It fully protects the inviolable contract for over 6,000 current employees, and supports retirement security for future employees.

The governor’s proposal pressures quasi-governmental organizations to leave the retirement system, and incentivizes them to freeze the pension benefits of employees hired before 2014. There are read more

Kentucky Public Universities and Community Colleges Serving More Low-Income Students and Students of Color Receive No Performance Funds in 2020

By Ashley Spalding
July 3, 2019

New information about the distribution of performance funds for Kentucky’s public postsecondary education institutions again raises concerns about the model, particularly given its implementation in the context of continued state budget cuts. In 2020, smaller institutions and some that serve students with greater challenges to degree completion — including a greater share of low-income students and students of color — are receiving no performance funds, much like in 2019.

Among those receiving no performance monies are the state’s historically black university, Kentucky State University, and institutions serving eastern Kentucky including read more

Pension Proposal Steers Quasi-Governmental Organizations Toward Breaking Promise to Current Employees

By Jason Bailey
May 1, 2019

A new pension proposal from the governor’s office pushes quasi-governmental organizations to leave the retirement system in ways that are still very expensive to them, and even less affordable if they would like to keep their current employees who are protected by the inviolable contract in the system.

The proposal is expected to add costs of over $800 million to the underfunded retirement system without identifying any way to pay them.

Proposed payment plans will make it very costly for many quasis down the road

As in prior versions of read more

Pension Bill for Quasis Jeopardizes Workers and Retirees, Increases State Costs Without Way to Pay

By Jason Bailey
April 2, 2019
The pension bill that passed the General Assembly last week, House Bill 358, reduces retirement security for future employees and jeopardizes pensions for thousands of current workers and retirees at quasi-governmental organizations like regional universities and community mental health centers. It will also shift costs to the state at the same time the General Assembly weakened its own ability to make those contributions by passing expensive new tax cuts this session.

Manufactured crisis forced decision about quasis

It is important to remember why the contribution rate for quasi-governmental organizations in read more

Tax “Clean-Up” Bill Includes More Giveaways

By Pam Thomas
February 21, 2019
Although House Bill 354 (HB 354) has been described as the “clean-up bill” that fixes the unintended consequences that occurred because of the rush in which the 2018 tax bills were passed, it is more than that. It also includes tax breaks that will deprive the commonwealth of sorely needed General Fund revenues in the future.

The reason our tax code is so full of holes, exceptions and special provisions is that every time the General Assembly passes a new revenue measure, special interests begin lobbying for an exception that read more