KY Policy Blog

Infographic: A State Earned Income Tax Credit (EITC) for Kentucky

By Ashley Spalding
March 18, 2014

The infographic below shows why adopting a state Earned Income Tax Credit (EITC) would be a good move for Kentucky. A state EITC could help more than 400,000 Kentucky families better afford basic necessities, lead to lasting improvements in the lives of children and increase fairness in Kentucky’s tax system. Currently 26 states (including the District of Columbia) have an EITC.

EITC graphic 3 read more

Interactive Map: How a State Earned Income Tax Credit Would Benefit Each Kentucky County

By Ashley Spalding
March 12, 2014

A state Earned Income Tax Credit (EITC) in Kentucky would build on the established benefits of the federal EITC, helping working Kentuckians better afford necessities and stimulating local economies. The following interactive map describes the positive impact a state EITC could have on each Kentucky county. Scrolling over a county on the map shows the number and share of people who would benefit and the additional dollars that would flow into each community. To view a larger version of the map, click here.

 

Dashboard 2 Learn About Tableau

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How Governor’s Tax Plan Differs from Tax Commission’s Recommendations

By Jason Bailey
February 5, 2014

Many of the proposals in Governor Beshear’s tax plan come from his Blue Ribbon Commission on Tax Reform. But his plan is also different—it leaves measures out that were included in the commission’s recommendations while adding some new proposals. Here’s a rundown of major changes between the commission’s recommendations and the governor’s plan.

Raises Less New Money Overall

One big difference between the commission recommendations and the governor’s plan has to do with the amount of revenue raised. The commission’s final report includes ideas that together would create a net read more

State EITC Would Help Working Kentuckians Afford Necessities

By Ashley Spalding
February 5, 2014

A state Earned Income Tax Credit (EITC), which is included in Governor Beshear’s tax proposal, would help several hundred thousand of Kentucky’s low- and moderate-income working families make ends meet—among many other important positive effects. Those who would benefit include single mothers, children and military families.

The federal EITC, which currently lifts about 6.5 million individuals—half of whom are children—out of poverty each year, has been shown to help working families afford basic necessities and provide long-term benefits to children. It also supports local economies. In 2013, the federal EITC read more

Statement on Governor Beshear’s State of the Commonwealth Address

By Jason Bailey
January 7, 2014

KCEP Director Jason Bailey released the following statement on Governor Beshear’s State of the Commonwealth address:

“Governor Beshear rightly focused his speech on the need for more resources to help address the deep cuts to education, health and other areas of the budget and begin investing in a more prosperous Kentucky. He said he will propose a specific tax reform plan to the General Assembly. That leadership is welcome.

The big question now involves the specifics of his plan and the debate about it in the General Assembly because in read more

Official Revenue Estimate for Next Budget Slightly Worse than Weak October Forecast

By Anna Baumann
December 20, 2013

The group of economists charged with predicting how much revenue Kentucky will have in the coming budget cycle approved a very modest revenue forecast for the next budget that’s slightly weaker than the preliminary forecast released in October. The estimate confirms that lawmakers will have scarce resources to meet basic costs in the new budget unless they also generate new revenue.

Compared to the October estimate, the new forecast shows $31 million less General Fund revenue in 2014, $14 million less in 2015, and $17 million more in 2016, for read more

Revenue Forecast for Next Budget Remains Weak

By Anna Baumann
October 11, 2013

Today the official group charged with forecasting state revenue again approved a very modest General Fund revenue estimate for the upcoming two-year budget. Compared to the draft forecast they chose in August, the new estimate assumes $59.5 million more revenue in 2014 and $29.6 more in 2015, but $23.9 less in 2016.

Higher than expected growth in the sales and corporate income tax in the last couple of months contributed to the slight improvement in expected revenue this fiscal year and next year. Recovery in the housing market and high read more

Revenue Forecast Shows Continued Deterioration of State Tax System

By Anna Baumann
August 16, 2013

The new long-term revenue forecast of the state’s Consensus Forecasting Group (CFG) suggests that Kentucky’s tax system will continue to deteriorate over the next four years, meaning tight funding for education, health care and other vital services.

In its first in a series of projections that will culminate in January with an official revenue estimate on which Kentucky’s 2014-16 budget will be based, the CFG chose a modest forecast for General Fund revenue growth. But as a share of the state’s economy, General Fund revenue is expected to decline.

GF as share of personal income-700x506

Source: read more

A Tax Shift Is Not Tax Reform

By Jason Bailey
June 7, 2013

A key question in Frankfort is whether state leaders will enact tax reform between now and the end of the 2014 legislative session.

But a challenge is the question posed by Senate budget chair Bob Leeper in a recent Louisville Courier-Journal article: “What do you mean by tax reform?”

Indeed. Tax reform is not an absolute good. Whether it helps or harms Kentucky depends on the purpose of the reform and the specifics of the proposal.

The recommendations of the governor’s tax reform commission, on which I served, were the read more

Bill to Collect Internet Sales Tax Would Help Kentucky’s Budget and Level Playing Field for Local Businesses

By Jason Bailey
May 1, 2013

Federal legislation requiring internet retailers to collect sales taxes owed to states would aid Kentucky’s depleted budget and end the unfair advantage out-of-state sellers have over Main Street Kentucky businesses.

The Marketplace Fairness Act passed the first hurdle in the Senate last week by a vote of 63 to 30, although Kentucky senators Mitch McConnell and Rand Paul voted against the measure. It’s expected to come to a full vote in the Senate next week, and then will be considered in the House.

A 1992 Supreme Court ruling has kept read more