Job Growth Claims from Right to Work Not Backed by Evidence

Proponents of Right-to-Work (RTW) argue that Kentucky would attract more jobs if such a law was in place, especially in manufacturing. But the evidence does not show our RTW neighbors have grown jobs more successfully than Kentucky in recent years, and academic research on the subject also doesn’t find a link between RTW and job growth.

Looking at statewide manufacturing job growth in Kentucky and our RTW neighbors, all are still below December 2007 employment levels before the Great Recession hit, but Kentucky is the closest to regaining the jobs that were lost.

rtwSource: Economic Policy Institute Analysis of Current Establishment Survey (CES) data.

At the local level, data from the Quarterly Census of Employment and Wages (QCEW) allows comparisons of the manufacturing sector in counties on either side of the Ohio River in the Louisville Metropolitan Statistical Area (MSA). Since Indiana went RTW in February 2012, manufacturing has fared better on the Kentucky side of the MSA than on the Indiana side.

indiana

Source: Bureau of Labor Statistics, QCEW.

More importantly, when researchers control for other factors they have found no evidence of an impact from RTW on job growth, as in a careful analysis of Oklahoma. A study by the Center for Business and Economic Research at the University of Kentucky also found no discernible positive impact from RTW on states’ economic growth.

While research hasn’t found a link between RTW and job growth, RTW is associated with lower wages. Controlling for other factors, workers in RTW states make 3.1 percent, or about $1,558 less a year (in 2015 dollars). Wage erosion harms workers, their families and our economy negatively, including by reducing demand for the kinds of goods manufacturers produce. Low and stagnant wages are already a central problem facing the economy, and we don’t need to make it worse.

Kentucky is wiser to focus on economic development strategies that improve our workforce skills, infrastructure and quality of life rather than approaches that reduce wages while failing to deliver the jobs that are promised.

The Path to a Stronger Commonwealth: Prioritizing Investments in Our Communities Over Tax Breaks for the Powerful

Kentucky faces a choice: cleaning up our tax code of special interest tax breaks so we can invest in excellent schools, a healthy and skilled workforce, modern infrastructure and other building blocks of thriving communities in the Commonwealth; or continuing to allow our tax code to be manipulated for the benefit of just a few, while essential investments fall farther behind. This report explores these two choices and provides direction for the road ahead. Moving forward means raising new revenue to invest in the foundations of thriving communities by cleaning up our tax code, eliminating breaks those at the top have managed to put there. Moving backward means undermining investments in a stronger state by failing to clean up tax breaks and continuing with more tax giveaways for those at the top.

You can view the report here.

New Medicaid Waiver Plan Keeps Approach from Problematic Original Proposal

The Bevin administration submitted its waiver proposal to the Department of Health and Human Services (HHS) today, keeping the problematic approach that was in the original plan with modifications in a handful of areas.  The proposal includes work requirements, premiums, lockout periods and other measures that would reduce the number of Kentuckians covered, some of which have been consistently rejected by the federal government in other state proposals.

The revised proposal includes the following measures:

Work Requirements for Participation

The plan includes a requirement that non-disabled adults without children engage in certain work and/or community requirements beginning after three months in the program. These activities start at 5 hours a week and ramp up to 20 hours a week after 1 year. Failure to do so results in suspension of benefits. One small change in the new plan is that caretaking for a disabled adult dependent or a non-dependent relative such as an elderly parent counts toward the work requirement.

Work requirements have been consistently rejected by HHS in waiver proposals, and rigorous evaluations show attaching similar requirements to safety net programs doesn’t work to reduce poverty.

Premiums with Lockouts for Failure to Pay and Other Penalties

Members will have to pay $1 to $15 in premiums a month based on income. After a year in the program, premiums continue climbing for those with incomes above the poverty line, up to $37.50 a month. A change in the new plan is that premiums are paid per household rather than per individual as originally proposed. Co-pays from the current program are eliminated for those paying premiums, though those co-pays are often not collected currently.

Enrollees must pay premiums within 60 days of becoming eligible. Those above the poverty line who do not pay are locked out of the plan for six months; they can re-enroll before that time if they pay three months’ worth of premiums and take a financial or health literacy course. For those below the poverty line, members not paying premiums keep benefits but must begin contributing co-pays and will lose access to their MyRewards account mentioned below. In the new waiver plan, those considered “medically frail” will not lose coverage if they do not pay premiums (and they are exempt from co-pays), but they also lose access to their MyRewards account if premiums are not paid.

Premiums have been attempted in past Medicaid experiments, and strong evidence suggests they significantly reduce the number of people covered.

Elimination of Vision, Dental and Transportation Benefits

Dental coverage would no longer be part of the regular Medicaid benefits package despite Kentucky’s poor oral health, and neither would vision coverage (the elimination of vision and dental benefits are delayed for the first three months of the demonstration in the revised plan). Also eliminated is help with transportation for non-emergency medical visits. The revised plan reinstates benefits for allergy testing and private duty nursing, which had been eliminated in the original proposal through a State Plan Amendment.

Elimination of Retroactive Coverage and a Lockout for Those Who Miss Signing Back Up

Currently, Medicaid provides retroactive coverage to new members for up to three months prior to enrollment. However, the proposal would make coverage start on the first day of the month payment is received (a pre-payment can be made to begin coverage for those not yet determined eligible). Because some people may not seek coverage until they have a serious health problem, this could mean facing unpayable health care bills.

If a member does not re-enroll for coverage before the expiration of each 12-month period, he or she loses coverage. The member then will have three months to re-enroll and if they do not must wait an additional six months to reenroll unless they take a financial or health literacy course. According to the Center on Budget and Policy Priorities, that’s something “no state has proposed doing.”

Complex New Administrative Systems

As before, the plan includes complex and expensive administrative systems to approve and track work and community engagement activities, financial and health literacy courses, and healthy behavior activities; to charge and collect premiums; to assess, manage, and track the costs and benefits of employer-sponsored health insurance programs; and to maintain two Health Savings Accounts (HSAs) – one for a high deductible account and the other for what’s called a MyRewards account.

Medicaid members would have a $1,000 deductible each year, though the plan contributes $1,000 to each member in a health savings account to make the payment. Half of the unused deductible each year will go into a second health savings account, called MyRewards. The MyRewards account is also set up to receive funds for certain health, community and job training activities. The monies in that account can be used for benefits not covered, and a new provision allows them to be used to pay fees associated with taking the GED. Monies are taken out of the account as a penalty for non-emergency use of the emergency room and potentially for “excessive missed healthcare appointments,” which is new to the final waiver request.

Attempts to Link Medicaid to Private Employer-Based Insurance

The waiver proposal attempts to link Medicaid to employer-provided insurance for those employers that offer coverage to workers who are Medicaid recipients. Members with access to these plans are encouraged — and ultimately required — to enroll in the employer-sponsored plans, and are given monies for the premiums (minus the Medicaid premium payment above). Medicaid pays for benefits the employer does not provide. According to a recent study of similar ideas, there are challenges with such programs and “more research is needed” to know how to administer them.

As in the original waiver proposal, the plan would result in fewer Kentuckians covered — in fact the proposal contains the same estimate of numbers of people who would lose coverage as in the original plan. (Data from report presents “member months,” and the table below converts that to number of members by dividing by 12).

waiver 1

Source: KCEP calculations from Kentucky HEALTH document.

Now that the waiver request has been submitted to HHS, there will be a 15 day review period to ensure the application has been completed correctly. Then the federal comment period will be opened for 30 days, and during that time comments can be made through the HHS waiver website by searching for Kentucky’s 1115 waiver. Once that period ends there is no deadline for approval or rejection, but past demonstration waivers have taken 6-12 months of negotiation during this phase.

Kentucky has been on the right track for the past two and a half years, and erecting barriers, reducing benefits, and creating confusing and expensive administrative systems will only move us backward on our health progress. It is crucially important that during negotiations between HHS and state officials the gains we have made are preserved.

Five Takeaways from Kentucky’s Year-End Revenue Results

Revenue receipts are in for June 2016, the final month of Kentucky’s last Fiscal Year (FY), showing modestly strong General Fund growth of 3.7 percent since 2015. Here are five big takeaways:

Revenue Growth Itself Isn’t Remarkable as It Almost Always Grows from Year to Year

Kentucky collected $372 million more in FY 2016 than in FY 2015. And while this increase shows Kentucky’s economy is growing – with people earning and spending more, thus paying more income and sales taxes, for example – it is the norm for our economy, and therefore revenue, to grow.

revenue growth

Source: KCEP analysis of Office of the State Budget Director data.

After the Great Recession, revenue dropped two times in FYs 09 and 10, but in the 6 years since, has grown every year — 3 times at a rate higher than in FY 16. Over the last 20 years, revenue has declined only 3 times, and has grown at a higher rate than in FY 16 8 times.

Whether revenue is growing enough is a different matter (one we can say more about in August when the state publishes quarterly economic data). For a long time in Kentucky, revenue growth has not been keeping up with economic growth, meaning our ability to sustain a certain level of crucial investments is eroding. And given Kentucky’s large pension liabilities and pressure to reinvest in education, human services and other areas, the gap between what we are generating and what we need is substantial.

It Is Unclear at this Point Whether We’ll Have a Surplus

It will be another month before state officials reconcile expenditures with revenue and announce if there was a surplus in FY 16. This process will account for necessary governmental expenses – unbudgeted expenditures such as natural disasters like the recent flooding in western Kentucky – as well as how much was actually spent by various agencies of state government compared to what was budgeted. Governor Bevin announced cuts of 4.5 percent for many parts of state government in FY 2016 and 2 percent for higher education.

Relative to the original forecast on which the 2016 budget was built, revenue collections were $292 million higher than expected (or 2.9 percent). Part of that difference can be attributed to improvement in our economy since January  2014 when the forecast was created, and some is due to the difficulty of predicting receipts two years out.

Compared to the official revised forecast from January of this year, revenue was just $49 million higher (0.5 percent) – a small difference in the context of a $10.3 billion General Fund.

Strong Revenue Growth is Needed to Address a Deepening Structural Deficit

Experts have predicted that if Kentucky does not address the holes in our tax code – especially the billions in tax breaks inserted into our tax laws by powerful interests – we face a structural deficit that could grow to $1 billion by 2020. That means a growing challenge in finding the money we need to invest in public schools, affordable colleges and universities, health and human services, and other services essential for thriving communities. The most recent two-year budget reflects this growing crisis, which pitted our pension liabilities against higher education, services for vulnerable Kentuckians and many other areas that received their 16th round of budget cuts since 2008.

Kentucky’s Individual Income Tax is Crucial to the State’s Ability to Improve

Sales and use tax growth outpaced individual income tax growth (IIT) by 0.8 percentage points in 2016 compared to 2015. But looking back over the years since the recession, the IIT has grown 41 percent or $1.2 billion while the sales tax has grown 23 percent or $645 million. Over the long term, income taxes grow more than sales taxes do.

income growth

Source: KCEP analysis of Office of the State Budget Director data.

The kind of tax reform Kentucky needs strengthens both income and sales taxes and resists jumping onto the income-tax cutting bandwagon that has been popular (and devastating) in other states. Cutting income taxes would weaken the strongest source of revenue growth we have to invest. The idea that shifting to a more sales-tax reliant system would make up for these losses is misguided: not only does it increase income inequality by asking even less of those at the top and more of everyone else, but it also ignores the problem that, in the context of growing income inequality, sales tax-reliant states struggle to generate enough revenue. That’s because a shrinking middle class means weakening demand for the purchases that generate sales taxes.

The Road Fund is Hurting Because Lawmakers Took Too Long to Raise the Gas Tax Floor

Despite action in the 2015 session of the General Assembly to raise the gas tax floor and adjust the rate setting process going forward, Kentucky roads and bridges – and therefore our motorists and economy – were not sufficiently protected from falling gas prices over recent years. With the tax based on the wholesale price of gasoline, declining global oil prices have impacted Kentucky revenue. Even though the Road Fund’s second biggest source of revenue, the motor vehicle usage tax, grew by 11.9 percent or $52 million in 2016, the entire fund shrank by 2.9 percent or $44 million to $1.5 billion. The gas tax itself shrank $100 million in FY 2016.

Continued Higher Education Cuts Place Kentucky Among Worst in Country

Kentucky is continuing its tumble to the bottom as one of the worst states in funding cuts to higher education, a new report from the Center for Budget and Policy Priorities shows.  Kentucky ranks 6th-worst among states in percentage cuts to higher education since 2008 and is in the bottom 10 among states in other funding categories, according to the report. This disinvestment once again threatens to limit students’ access to higher education, as well as our state’s opportunities for economic growth.

While most states have begun to restore higher education funding after cutting during the recession, Kentucky continues to cut, including with last-minute cuts for 2016 by Gov. Matt Bevin and with additional cuts coming in July when the new fiscal year begins — all together a 4.5 percent cut. These continued cuts make it harder for students to afford college and for the state to invest in our communities and grow jobs and businesses.

“As Kentucky continues to cut, we start reversing all the gains made by past education improvements,” Ashley Spalding, research and policy associate at the Kentucky Center for Economic Policy, said said. “We are sliding backwards, when what we should be doing is investing in our education institutions, which in turn is investment in our communities. We should follow the lead of the majority of states and start increasing funding for higher education again, instead of balancing our state budgets on the backs of students.”

Some “lowlights” of Kentucky in the report:

  • Since the recession, Kentucky has cut higher education funding 32 percent, one of 8 states to cut more than 30 percent since 2008. Kentucky’s ranking of 6th-worst among states in percentage cut since 2008 is a fall from 11th-worst in last year’s report.
  • Kentucky is one of 11 states that are continuing to cut higher education in the current year, in contrast to 37 states that are increasing funding. Five states actually increased per student funding by more than 10 percent this year.
  • Kentucky is one of three states that has cut funding for the past two years joining Vermont and Arkansas.

In order to stop Kentucky’s higher education funding slide, lawmakers should clean up the tax code by ending some of the billions of dollars in tax breaks that drain revenue so we have the resources to better invest, Spalding said.

For the average student, federal and state aid has not kept pace with rising costs, the report found.

“More young people could afford college and gain for themselves and the economy the benefits of greater earnings if states reversed their declining support for higher education,” said Michael Mitchell, senior policy analyst at CBPP and lead author of the report.

You can view the report here.

Governor Vetoes Need-Based Scholarships for Thousands of Students

Governor Bevin vetoed $40.3 million in funding for need-based college scholarships contained in House Bill 10, meaning denied aid for nearly 22,000 low-income students that had been awarded by the General Assembly. This is at the same time the budget cuts funding for higher education by 4.5 percent, leading to tuition hikes at the public universities and community colleges.

The governor’s vetoes also delay the start of the Work Ready Scholarship, a program designed to help some traditional-age students pursue associate’s degrees, by one year from 2017 to 2018. That amounts to a cut of $9.4 million. Some or all of that $9.4 million may end up going to the need-based college aid programs — known as the College Access Program (CAP) and the Kentucky Tuition Grant (KTG) programs — but the amount is unclear. The budget does increase funding for CAP and KTG compared to the previous biennium of at least $14.7 million, or nearly 8,000 more scholarships. However, with the vetoes the budget does not meet the statutory promise that 55 percent of lottery dollars will go to need-based aid, as the General Assembly’s budget nearly achieved.

Separately, the governor vetoed House Bill 626 which sets up the statutory framework for the Work Ready Scholarship as well as for a performance-based higher education funding system, a dual credit program and a board to oversee the $100 million workforce development bond included in the budget. This veto does not affect the funding for those programs in this budget.

The governor vetoed an expansion of eligibility for preschool from 160 percent to 200 percent of the federal poverty line. This veto does not reduce the amount of funding that goes into preschool, but may limit schools’ ability to fully utilize preschool funds. Earmarks were also eliminated for the ACT and WorkKeys testing program and the Every1 Reads program.

The governor’s vetoes delete up to $7.5 million over the biennium for the Quality and Charity Care Trust Fund at the University of Louisville Hospital, which helps cover health care costs for the uninsured. While spending on this program has declined dramatically in recent years thanks to Medicaid expansion under the Affordable Care Act, some monies are still needed and Kentucky’s uninsured rate is at risk of going up because of the governor’s plans to shut down Kynect and make changes to Medicaid. Similarly, language is deleted that earmarks $1.5 million for breast, cervical and colon cancer screening.

The governor’s vetoes also include eliminating language outlining how the governor will deal with allotments and budget reductions if there is a shortfall, issues that the governor is now in litigation with the Attorney General over for the 2016 fiscal year. In addition, language changes were made that give the executive branch more flexibility in how certain monies are spent.

General Assembly’s Budget Includes Critical Scholarship Investments

The final budget agreement that passed the legislature includes significant new investment in the state’s college scholarship programs. Over the biennium, the funding increase for Kentucky Higher Education Assistance Authority (KHEAA) is $121.5 million over what was budgeted for the prior two-year period. This new money for scholarships is important for helping Kentuckians better afford college — particularly the state’s low-income students — and the governor should affirm these investments as he makes final decisions about the budget.

These improvements in financial aid funding are especially critical given the budget’s 4.5 percent cut, or $60.4 million over the biennium, to public universities and community colleges. Last year, Kentucky already ranked 11th among states in highest per-student cuts to higher education since 2008. With new budget reductions for postsecondary institutions Kentucky’s national position will only worsen, as will its college affordability problem as the public universities and community colleges will likely need to raise tuition in order to help compensate for the funding shortfall.

Already a college education remains financially out of reach for many Kentuckians. We have the highest community college tuition in the region, tuition increases since 1999 in the range of 206 percent (at Murray State) to 286 percent (at Western Kentucky) at the state’s public postsecondary institutions and the third highest student loan default rate in the nation.

State scholarship programs can help somewhat mitigate these costs — particularly need-based financial aid like the state’s College Access Program (CAP). And unlike in recent years, the budget agreement provides close to full statutory funding for both CAP and the Kentucky Tuition Grant (KTG). For several years, tens of thousands of qualified students have been turned away from these programs because much of the lottery money intended by law to fund them was instead siphoned off to help with other areas of the budget. In contrast, the two scholarships would receive $238.9 million across the biennium in the new budget agreement, nearly $55 million more than in the previous biennium. This translates to close to 30,000 more need-based scholarships in total. These funds were appropriated in the budget bill as well as through a supplemental appropriation in House Bill (HB) 10.

Additionally, the state legislature agreed to create a new $25 million scholarship program to pay full tuition costs (after other scholarships) for graduating high school students entering associate’s degree programs at the state’s community colleges, public universities and nonprofit colleges. The program, called Work Ready Kentucky, will contribute toward making college affordable for selected traditional age students seeking associate degrees. The budget bill also includes a new dual credit scholarship ($15 million over the biennium) through the merit-based Kentucky Education Excellence Scholarship (KEES) for high school students enrolling in college classes.

The budget bill that passed the General Assembly and HB 10 are awaiting Governor Bevin’s approval, veto or line-item veto. Given the additional cut to university and community college funding contained in the budget and the growing recognition that financial barriers at the key challenge to college completion, it’s critically important that the thousands of scholarships that help students afford college be included in the final document.

Senate Budget Maintains Governor’s Deep Budget Cuts, Increases Pension Contributions by Reducing Governor’s Set-Aside Funds

To view in PDF format, click here.

The Senate budget maintains the governor’s dramatic proposed cuts of nine percent to postsecondary education, parts of P-12 education and a wide range of services affecting health, quality of life and vulnerable Kentuckians. Its primary difference from the governor’s plan is to leave less money in the rainy day fund and a proposed permanent fund while increasing direct funding for pensions.

The Senate budget is similar to the House plan when it comes to total pension funding. The main difference between the two is the Senate still leaves $336 million more in the rainy day fund and permanent fund combined at the end of the biennium than the House, which uses those monies to reduce budget cuts in education and other areas.

Maintains the Governor’s Deep Budget Cuts to Higher Education and Many Other Areas

The Senate budget includes the governor’s budget cuts of 9 percent (4.5 percent this year) to many parts of state government with few modifications.

It includes 9 percent cuts to higher education institutions, which would mean funding for universities and community colleges will have been reduced by 35 percent between 2008 and 2018 once inflation is taken into account. In 2018 it puts 25 percent of higher education funding into a new performance-based system in which institutions must compete against each other for their portion of those funds (Kentucky State University is excluded).

The Senate budget does not include $57 million the House had proposed for need-based lottery-funded scholarship programs — the College Access Program and the Kentucky Tuition Grant program — which have had dollars diverted from them in recent budgets 1. The Senate also doesn’t fund the Work Ready scholarship proposed by the House that fills the gap in providing free tuition to traditional age students at the state’s community colleges. Instead, the Senate plan puts $58.9 million over the biennium into Kentucky Educational Excellence Scholarships (KEES), which are based on grades, for high school students who are dually enrolled in college credit or technical programs.

The Senate goes along with the governor’s budget in including nine percent cuts to the non-SEEK portions of P-12 education, which the House budget had not cut. Within Learning and Results Services, that means cuts of nine percent to areas like preschool, extended school services, teacher professional development and instructional resources. Family resource and youth services centers are cut by 6.3 percent, paid for by defunding a few programs including dropout prevention and the visually impaired preschool services program.

The Senate budget does not expand eligibility for preschool from 160 percent to 200 percent of the poverty level, as in the House plan. Like the House, the Senate would essentially freeze funding for SEEK, the core funding formula for schools.

The Senate cuts other areas as the governor proposed that the House had exempted from cuts, including constitutional offices (Attorney General, Secretary of State, Auditor, Treasurer, Agriculture), Kentucky Educational Television, Office for the Blind, Libraries and Archives, Board of Elections, Registry of Election Finance, Kentucky Center for the Arts, Commission on Human Rights, Commission on Women and the Executive Branch Ethics Commission.

Like the House and the governor, the Senate includes approximately nine percent cuts to other areas including behavioral health, community-based services, environmental protection, public health, aging and independent living, Kentucky Arts Council, Educational Professional Standards Board, natural resources, energy development and independence and the Kentucky Nature Preserves Commission 2.

The Senate budget deletes the House’s proposed additional $10.6 million each year to expand eligibility for child care assistance from 150 percent to 160 percent of the poverty level. The Senate also deletes an authorization included in the House budget of up to $10.5 million over the biennium for the fund that provides care for the uninsured at University of Louisville Hospital, as well as monies for colon, breast and cervical cancer screening 3.

The Senate budget eliminates funding for 44 new public defender positions both the House and governor had included to help with caseloads. As in the House budget and the governor’s proposal, there are again no raises for employees in the budget other than selected raises for a few occupations such as social workers and state police.

Contributes Similar Overall Amount to Pensions as House

The Senate agreed with the House in making significantly larger contributions to employee pensions than the governor proposed, with a contribution of $1.195 billion over the biennium compared to $1.123 billion in the House plan. That compares to $845.5 million in what the governor proposed.

The Senate somewhat changed the mix of funding to the pension plans compared to the House. The House included the full actuarially required contribution (ARC) to the Kentucky Teachers’ Retirement System (KTRS) over the biennium, while the Senate plan includes 88 percent of the KTRS ARC. The Senate plan puts over three times the amount the House does in additional dollars above the ARC to the Kentucky Employees’ Retirement System (KERS) (see graph below, which does not include base funding for the systems).

senate budget 1

Source: KCEP analysis of HB 303 SCS.

The Senate also leaves $250 million in a permanent fund compared to $500 million in the governor’s plan and $0 in the House budget 4. The Senate leaves a rainy day fund balance of $371.5 million at the end of the biennium compared to $283 million in the House plan and $524 million in the governor’s budget (see graph below) 5. In total, The Senate leaves $336 million more in idle funds at the end of the budget period than does the House.

senate budget 2

Source: KCEP analysis of HB 303 SCS.

The Senate’s budget is built with $634 million in fund transfers over the biennium, compared to $638 million in the House budget and $611 million in transfers contained in the governor’s plan. The Senate budget includes $580 million in new debt for capital projects compared to $549 million in the House plan and $625 million in the governor’s budget. In the Senate, that includes $50 million for a workforce development construction pool, which the House had not included in its budget but for which the governor had proposed $100 million. The Senate budget does not allow postsecondary institutions to issue debt on unauthorized, self-funded capital projects over $600,000, as the House had allowed.

Other Important Differences

  • The Senate maintains that approximately half of coal severance money will continue going to the General Fund, with half going back to counties through a variety of programs and local revenue sharing. It includes no specific local projects as the House included. The House budget begins to shift more coal severance tax dollars back to counties and local spending, with a plan to make that transition complete over four years. Some of the programs previously funded with coal severance dollars, like Operation Unite and the SOAR initiative, are funded through other parts of the House budget.
  • The Senate budget repeals prevailing wage on public construction projects, while the House budget does not.
  • While the House had required specific funding amounts for certain programs within some of Cabinets, the Senate restores the discretion to the Executive Branch the governor had proposed.

 

  1.  Dustin Pugel, “Fact Sheet: Need-Based Financial Aid Dollars Being Diverted to General Fund,” Kentucky Center for Economic Policy, February 23, 2016, http://kypolicy.org/need-based-financial-aid-dollars-being-diverted-to-general-fund/.
  2.  Anna Baumann, “House Budget Does Not Restore Many Crucial Services for Vulnerable Kentuckians,” Kentucky Center for Economic Policy, March 18, 2016, http://kypolicy.org/house-budget-not-restore-many-crucial-services-vulnerable-kentuckians/.
  3.  Jason Bailey, “Uninsured Costs at U of L Hospital Have Dropped Dramatically Because of Medicaid Expansion and Kynect, But Could Go Up with Changes,” Kentucky Center for Economic Policy, March 22, 2016, http://kypolicy.org/uninsured-costs-u-l-hospital-dropped-dramatically-medicaid-expansion-kynect-go-changes/.
  4.  Jason Bailey, “Why the House Budget Approach Is Better than a Big Set Aside of Idle Funds,” Kentucky Center for Economic Policy, March 18, 2016, http://kypolicy.org/house-budget-approach-better-big-set-aside-idle-funds/.
  5.  The House budget also includes some items in its budget as necessary governmental expenses that will reduce the final amount in the rainy day fund.

Revenue Options that Strengthen the Commonwealth

Kentucky has good options to fairly generate new revenue and put an end to year after year of deep cuts to vital public investments, as outlined in a report by the Kentucky Center for Economic Policy (KCEP).revenue options

The report, “Revenue Options that Strengthen the Commonwealth,” identifies more than 30 options to clean up Kentucky’s tax code, raise new revenue and restore and sustain critical investments in schools, higher education, health and more. These options and others are an alternative to even deeper cuts to public investments.

The options include limiting income tax breaks for high earners, expanding the sales tax base to include services and closing special interest loopholes that are draining resources from the state budget. The report also suggests reforms to help the struggling Road Fund.

You can view the report here.

2016 Kentucky Budget Primer

The Budget of the Commonwealth is a financial plan, enacted every two years by Kentucky’s General Assembly, that maps out our state’s investments in education, health, transportation, public safety, human services and other areas that build a strong state economy. As such, the budget is a statement of Kentucky’s priorities: How we invest reflects our commitment to flourishing communities today and to a more prosperous economy for all tomorrow.

This primer covers the basics of the Budget of the Commonwealth: where money comes from, how it is spent, and the people and processes that determine both. The primer also examines Kentucky’s fiscal health: Do we have what it takes to pay for the public services that make Kentucky a good place to live, work and raise families and that empower homegrown entrepreneurs and attract people to our state? What priorities and values are reflected in the budget decisions our elected officials make?

You can view the primer here.