The 2018 Kentucky General Assembly featured larger throngs of protestors than any session in recent memory. Thousands of Kentuckians trekked to Frankfort to stand up to an agenda they saw as serving powerful special interests rather than the workers and families of the state.
That pushback is the reason major legislation was snuck through the process without the open air of committee hearings and public debate. Most notoriously, lawmakers in the House inserted a brand new pension bill into wastewater sewage legislation and passed it quickly without the required actuarial analysis. Soon after, a far-reaching overhaul of the state tax system was unveiled and passed in a single day. Lawmakers used these backdoor tactics because they knew their ideas would be unpopular.
Now that we are able to study those bills and others, we see why.
The new tax law is a shift, cutting taxes for the wealthiest 5 percent while increasing taxes on average for the bottom 95 percent of Kentuckians. It’s especially a tax cut for the richest 1 percent, who make on average $1 million a year and will pocket over $7,000 from the law. The changes also give more tax breaks for big corporations, who will pay lower rates and take advantage of new rules to lower their taxable income. In total, the new law will make our already upside-down tax system even more so.
The tax law is projected to raise a small amount of new revenue over the next two years, but will weaken the state’s revenue stream over time. That’s because it follows the path of Kansas and other states by moving away from our strongest revenue source, income taxes, toward slower growing consumption taxes on items like cigarettes, bowling and car repair. That’s no way to sustain the public investments we need to prosper.
While the new budget funds pensions responsibly and puts needed dollars into a few areas like social workers, it continues troubling trends. The budget contains the 20th round of cuts since 2008. Base SEEK, our core K-12 funding for public schools, will be funded with less total money in 2020 than it is today, and per pupil SEEK will be 16 percent below what we spent in 2008 once inflation is taken into account. It cuts parts of the budget ranging from higher education to services for the elderly to preschool by 6.25 percent, and again lacks raises for public employees — for the 8th time in 10 years.
The budget is a recipe for wider funding gaps between rich and poor communities, layoffs (already seen at places like Eastern Kentucky University), longer waiting lists for vulnerable Kentuckians and more.
The pension bill also harms families and workers – and our ability to achieve our education goals – by ending the inviolable contract for new teachers and shifting them to a riskier cash balance plan. We’ve seen the same shift make it harder to attract new firefighters and police officers since adopted in 2013. Without the security of a defined benefit plan, the low pay of public employment is less attractive — and the quality of public services is affected.
The 2018 General Assembly also created new barriers to benefits for those getting hurt on the job — including older workers and coal miners with black lung disease. Already, restricted benefits have resulted in declining employer workers’ compensation premiums for two decades, with costs now 17 percent lower than the national median. Yet the bill will cut premiums further and increase profits for insurance companies at the expense of injured workers.
And new legislation means more incarceration of young people, particularly people of color. The so-called gang law will make it much easier for those convicted of even misdemeanors to serve long jail terms simply because someone can associate them with a gang, now more broadly defined as three or more people with a couple of things in common. The law will take $19.5 million from other needs in the budget and is likely to backfire by increasing gang solidarity in prisons.
The policies that dominated the 2018 session will further widen the gap between those at the top and the rest of us. People flocked to Frankfort because they felt they were getting the shaft. Between now and next session, they will be looking for a shift to policies that serve Kentucky’s people first.
This column ran in the Lexington Herald-Leader on April 18, 2018.
