• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Kentucky Center for Economic Policy

Kentucky Center for Economic Policy

   

  • About Us
  • Press Room
  • Events
  • Job Opportunities
  • Donate

Research That Works for Kentucky

  • Topics
    • Budget & Tax
    • Criminal Justice
    • Economic Security
    • Education
    • Health Care
    • Jobs & The Economy
  • Types
    • News
    • Op-Ed
    • Research

   

  • About Us
  • Press Room
  • Events
  • Job Opportunities
  • Donate

Copyright © 2021 KyPolicy Privacy Policy Terms & Conditions Sitemap

Analysis

New Year-End Data Show Kentucky’s General Fund Continuing to Erode

Anna Baumann | August 1, 2014

In order to maintain investments in education, health, safety and other services that our citizens, businesses and communities rely on, Kentucky needs revenue growth that keeps pace with the economy. But the latest data show that General Fund revenues are continuing a decades-long trend of erosion, affirming once again that structural problems with the tax system are obstacles to moving our state forward.

As seen in the graph below, General Fund revenue has fallen from 7.3 percent of the state’s economy in 1991 to 5.9 percent in 2014. Since Kentucky has about a $161 billion economy, a one percentage point drop in this number is equal to about $1.6 billion in lost state tax revenue in a budget that only equals $10 billion.

More On Budget & Tax: Governor’s Budget Increases Funding for Relief and Reinvestment

General Fund as Share of Economy July 2014
KCEP analysis of data from the Office of the State Budget Director, Bureau of Economic Analysis.

Why are resources shrinking relative to needs? Because despite the well-studied effects of too many costly loopholes, breaks and exemptions in Kentucky’s tax system, we have yet to enact tax reform that generates sufficient new revenue in a sustainable way. Unless we fix those problems, then even during good economic times, revenue will fall short. In fact, experts who testified to the Blue Ribbon Commission predicted that in the absence of tax reform, the gap between what we need to maintain current services and what our revenue system generates will grow by an additional $1 billion by 2020.

The trend is not irreversible. There are specific policies and vital principles that can be the basis of a good tax reform package. Kentucky just needs leaders who are willing to take action.

FacebookTweetLinkedInEmail

Primary Sidebar

Get KyPolicy news updates in your inbox

Sign Up

Sidebar

Perspectives

Kentucky Must Remove the Roadblocks to Unemployment Insurance — Our Most Important Economic Stabilizer

Many Kentuckians Face Hunger and Hardship This Thanksgiving. They Need Relief.

Kentucky Lives and Livelihoods Are on the Line with Supreme Court Challenge to ACA

Letter to Governor Beshear: Priorities for Use of Remaining Coronavirus Relief Fund Monies

Congress Can’t Go Home Without Passing a Strong Aid Package

Other Budget & Tax Items

Gov Budget analysis

Analysis

Governor’s Budget Increases Funding for Relief and Reinvestment

Money Harvest slot machine thumbnail 1

Analysis

Any Action on Proliferating Slot Machines Must Raise Artificially Low Tax Rate

budget preview cover image

Analysis

Defeating the Pandemic and Building a Robust Recovery: A Preview of the Budget of the Commonwealth

Ky. Policy

Footer

Research that works for Kentucky

433 Chestnut Street, Berea, KY 40403

Phone: 859-756-4605

General information and inquiries: info@kypolicy.org

   

Help us make the facts free and accessible to everyone. That’s how Kentucky will thrive.

Donate

  • Topics
    • Budget & Tax
    • Criminal Justice
    • Economic Security
    • Education
    • Health Care
    • Jobs & The Economy
  • Work
    • News
    • Op-Ed
    • Research
  • About Us
  • Press Room
  • Contact

Get KyPolicy news updates in your inbox

Sign Up

Copyright © 2021 KyPolicy Privacy Policy Terms & Conditions Sitemap

made by P&P
Share this ArticleLike this article? Email it to a friend!

Email sent!
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you consent to the use of cookies.OkPrivacy policy