KY Policy Blog

Why the Senate COVID Proposal Fails to Meet Kentucky’s Economic Needs

By Dustin Pugel
July 29, 2020

The new Senate aid proposal, known as the Health, Economic Assistance, Liability and Schools (HEALS) Act, falls far short of the breadth and depth of aid needed to fight the COVID-19 pandemic and weather the deep economic downturn. By including only 1/3 of the funds contained in the HEROES Act passed by the U.S. House of Representatives back in May, it leaves out critical assistance aimed at helping laid off workers, holding off a wave of evictions, fighting hunger, and preventing harmful cuts to state and local governments. Providing inadequate read more

Kentucky’s Largest Cities Spend a Quarter of Their Budgets on Police

By Dustin Pugel and Pam Thomas
June 11, 2020
Amid growing attention to harmful overpolicing of Black communities, many are calling on cities to begin shifting public resources away from policing toward social services, mental health, affordable housing and other underfunded services that address social inequities and build safe, healthy communities. As evidence of existing priorities, Kentucky’s 5 largest city governments – home to 58.3% of all Black Kentuckians – spend roughly 25% of their General Fund budgets on police, or $277 per resident on an annual basis. Those same cities spend an average of 4.8% on a variety read more

What’s in the HEROES Act for Kentucky

By Dustin Pugel and Jason Bailey
May 22, 2020
The U.S. House of Representatives has passed the HEROES Act, a bill that would provide the kind of substantial economic relief Kentucky and other states need in the face of the COVID-19 recession. The Senate must now join the House and agree to a relief package that adequately supports families, governments and businesses through this crisis and sets the stage for a robust economic recovery when the pandemic is eventually behind us.

Here are what major elements of the HEROES Act would mean for Kentucky:

Substantial relief to state and read more

Cities and Counties Need Federal Relief to Continue Providing Crucial Services

By Pam Thomas
May 21, 2020
As with states, local governments in Kentucky and nationwide need significant federal relief if they are to continue providing crucial front line and community services through the COVID-19 pandemic. Measures preventing the spread of COVID-19 are deeply suppressing the economic activity that fuels local revenue receipts, and the significant impact on cities and counties is expected to continue over several years. Much more federal aid – as is proposed in the recently introduced HEROES Act – is needed to prevent painful cuts and avoid lengthening and deepening the economic downturn. read more

New Forecast Shows Collapse in State Tax Revenues from COVID-19

By Pam Thomas
April 30, 2020
Kentucky’s General Fund tax revenues will crater in the coming months due to the COVID-19 downturn, according to a new unofficial forecast released today by the Office of the State Budget Director (OSBD). The forecast offers both a “control” and “pessimistic” scenario, and estimates that General Fund revenues in the fourth quarter of the current fiscal year will be 18.2% to 23.7% less than the same period last year. For the first two quarters of the next fiscal year, revenues are expected to fall between 10.5% and 17.2%.

The numbers 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

Kentucky Not Prepared for Next Recession

By Ashley Spalding
March 23, 2020

Amid the spread of COVID-19 and resulting business closures and layoffs, a recession is under way and could be particularly harmful in Kentucky due to the state’s failure to adequately prepare. Kentucky is among the 12 states least prepared for America’s next recession, according to a new report from the Center on Budget and Policy Priorities.

Kentuckians with low incomes and people of color are especially at risk of COVID-19, job losses, wage cuts, lapses in health care coverage and other resulting hardships. As a result, state responses – in read more

SB 1 Would Harm Kentucky Kids, Economy

By Anna Baumann
March 19, 2020

After receiving a second reading on the House floor yesterday, Senate Bill 1 (SB 1) continues to advance in the House, despite the harms to Kentucky kids and our economy and the need to pass a budget with COVID-19 related provisions and adjourn the session.

SB 1 will voluntarily increase Kentucky’s coordination with federal immigration enforcement through both local law enforcement activities and the collection of data by a wide range of public agencies. While research shows that aggressive state and local enforcement policies do not promote public safety, they read more

Kentucky Response to COVID-19: Inadequate Rainy Day Fund Heightens Need for Federal Aid and More State Revenue

By Jason Bailey
March 13, 2020

States set aside rainy day funds to draw on when economic downturns or crises hit. Governor Beshear may well need to tap the state’s rainy day fund to deal with the costs of directly addressing the COVID-19 pandemic, which he has the authority to do after declaring a State of Emergency.

But Kentucky has among the most depleted rainy day funds in the country, with only enough money for the equivalent of 4 days of state budget needs (and 10 days by the summer, after additional dollars are scheduled to read more

Three Steps to Passing a Better Budget for Kentucky

By Pam Thomas
March 12, 2020

The budget passed by the House mostly avoids another round of damaging cuts to programs and services that have been common since the Great Recession (with a few important exceptions, like the elimination of direct aid to libraries). However, because it is based on the worst revenue forecast in 25 years and is not accompanied by significant revenue raisers, there simply isn’t enough revenue to support the level of investment necessary to move the commonwealth forward.

Furthermore, there will likely be additional fiscal strain in Kentucky related to the quickly read more