“A Time To Invest” report provides detailed budgetary context and describes the historic opportunity to restore critical areas of funding
The 2022 General Assembly gavels in today, and will shortly craft a new two-year state budget that has the potential to chart a course to a strong and equitable recovery. A comprehensive new report from the Kentucky Center for Economic Policy (KyPolicy) details the state’s historic budget surplus and unspent federal aid that provide the resources needed to leave behind the budget austerity of the last decade and begin reinvesting in a better future.
Thanks to federal aid, General Fund receipts grew by 10.9% in FY 2021, which was the highest annual growth rate in 26 years, and actual revenues exceeded the estimate by more than $1.1 billion – the largest in Kentucky’s history. The official revenue forecast predicts an even bigger surplus at the end of the current fiscal year, creating a historic $3.4 billion in extra resources available for the biennial budget. In addition, the state has $1.1 billion in unspent American Rescue Plan Act monies it can use to address pandemic-related hardship.
“The priorities for these funds should be to build a bridge to the other side of the pandemic for those who are still struggling, and to better fund the services that make our communities strong: schools, child care providers, human services, higher education and more,” said Jason Bailey, Executive Director of KyPolicy. “We’ve been cutting these vital services for far too long. With historic revenues, there is no excuse not pay our teachers, social workers and other state employees what they deserve, or to better fund the public services that make us educated, healthy and safe. The legislature can recommit to a thriving, prosperous commonwealth with this budget.”
The 45-page report, which can be found at this link, begins with an in-depth look at the revenue context for Kentucky’s historic opportunity to invest. The second part of the report describes the imperative to invest: the impact, by budget area, of past funding decisions, from cuts in K-12 and overburdened social worker caseloads, to long waiting lists for human services and overspending on incarceration. And the report warns against giving away the surplus on more tax cuts and subsidies for the wealthy and corporations instead of the budgetary investments Kentucky needs to thrive.
Click here to read the full report.