KY Policy Blog

What’s In the Senate Pension Bill

By Jason Bailey
February 21, 2018

The Senate’s pension legislation, introduced as SB 1, includes cutting teachers’ cost of living adjustments, moving new teachers into a less secure hybrid cash balance plan and requiring an expensive method of paying unfunded liabilities known as “level dollar.”

Major components of the bill include the following:

Current employees and teachers lose benefits

The bill includes a number of reductions to benefits for current teachers and employees. For teachers, it cuts in half the annual cost of living adjustment received in retirement for 12 years, reducing it from 1.5 percent  read more

Switching to 401ks Is a Lose-Lose

By Jason Bailey
February 12, 2018

It’s a bad idea for Kentucky to shut down its pension plans and move new teachers and public employees into less efficient 401k-type defined contribution (DC) plans. State and local governments would pay more while workers would receive a smaller and less secure benefit. It’s a lose-lose proposition for employees, the quality of public services and the commonwealth as a whole.

DC plans cost more than Kentucky’s existing pension plans

A switch to DC plans will fail to save money because the employer contribution for new workers in Kentucky’s existing read more

Gang Bill Unproven and Costly Approach

By Ashley Spalding
February 6, 2018

House Bill 169 proposes to make charges and related sentences much harsher for some crimes committed by individuals identified as gang members. This is an unproven approach to addressing gang violence. Its expanded definition of gang membership could disproportionately and unfairly harm communities of color, and would be costly at a time when Kentucky is in great need of common sense reforms to safely address the state’s growing inmate population and overwhelmed criminal justice system.

What the Bill Does

Enhances penalties for gang recruitment: There is already a state statute read more

Significant Cuts Proposed for PVA Offices Will Harm Property Tax Revenues Statewide

By Pam Thomas
February 2, 2018

Kentucky’s Property Valuation Administrators (PVAs) told a House Budget Review Subcommittee yesterday that the governor’s budget contains cuts of 23.5 percent to PVAs that would require layoffs of approximately 40 percent of PVA staff statewide (250 of the current 593.5 state funded employees). They also testified that the cuts would severely compromise their ability to do their jobs and generate more property tax revenue for the state and local taxing districts.

Who Are PVAs and What Role Do They Play?

Each county in Kentucky has a publicly elected Property Valuation read more

Adequate Fund Balances are Crucial for Prudent School District Management and Should Not be Relied Upon to Make Up for State Funding Cuts

By Pam Thomas
January 29, 2018

One of the ways the governor’s budget expects local school districts to make up for significant cuts he has proposed in state support for education, including transportation and teacher health insurance, is through spending down district reserves.  State law requires school districts to budget for a minimum reserve of at least two percent of the total school budget. However, districts that are able to retain balances greater than the statutory minimum because of sound financial practice, including needs for debt service coverage, bond trustee requirements and bonding capacity, credit rating, read more

Governor’s Budget Cuts Per-Student SEEK Funding

By Ashley Spalding
January 23, 2018

The Support for Education Excellence in Kentucky (SEEK) formula is the primary source of funding for the state’s local school districts. Despite the perception that SEEK funding is not cut in the governor’s budget proposal, a detailed look shows this is not the case.

One part of the SEEK formula is base funding, which comes from a combination of resources raised by the local district as well as state funding. This base funding amount is often referred to as the “per-pupil guarantee” and the level is established for each year read more

School Voucher Tax Break Proposals Further Threaten Funding for Public Education

By Anna Baumann
January 10, 2018

Bills have already been filed in both the Senate and the House this session that would further threaten resources for Kentucky’s already underfunded public schools and other services, allow high-income Kentuckians to make money from “donations” to private schools and allow relatively well-off Kentuckians to benefit from the private school scholarships the bills would create. These proposals, referred to by proponents as “Ed Choice” tax credits, are thinly disguised private school vouchers that shift resources from public services to private schools.

Tax Breaks Will Reduce Resources for Kentucky’s Public Schools read more

Massive New Federal Tax Cuts for the Wealthy Should Be a Resource for Kentucky’s Budget

By Jason Bailey
January 3, 2018

Kentucky is facing a major gap in its next two-year state budget that could mean unprecedented cuts to education and other services. But the General Assembly could look to the money coming from huge new federal tax cuts for the wealthy to help bridge that gap.

The richest 20 percent of Kentuckians are expected to receive $2.1 billion in federal tax cuts in 2019 because of the bill that passed Congress and was signed into law by President Donald Trump in December. Those high-income individuals will receive 69 percent of read more

Passage of the Dream Act Would Benefit Kentucky

By Anna Baumann
December 21, 2017

In September, the Trump Administration announced the end of DACA (Deferred Action for Childhood Arrivals), a program established by executive order that granted immigrant youth who were brought to the U.S. as children temporary relief from deportation and authorized them to work. By passing the Dream Act, Congress can restore and even strengthen the legal protections for these young Kentuckians who contribute to our commonwealth by going to school, working, paying taxes and more. In the absence of a Dream Act, Dreamers, their families and our communities will be harmed. read more

New Tax Expenditure Report Obscures Growing Costs

By Pam Thomas
December 21, 2017

The Office of State Budget Director (OSBD) released the Tax Expenditure Report for the 2018-2020 biennium late last month. The new report is misleading because it does not include in the grand total of all expenditures located in the executive summary a number of tax expenditures detailed in the body of the report, making total costs appear smaller than they actually are.

The purpose of the Tax Expenditure Report, which is required by language in the executive branch budget, is to identify revenues lost for the current and next two read more