KY Policy Blog

Ryan Budget Would Mean Substantial Funding Cuts in Kentucky

By Anna Baumann
March 27, 2013

House Budget Committee Chairman Paul Ryan’s budget—which the House passed by a slim margin last week—would cut funding to state and local governments in Kentucky by an estimated $301 million in the coming year and $3 billion over the next 10 years, according to a report released today by the Center on Budget and Policy Priorities.

The report is based on the assumption that the federal government would cut funding to state and local governments by the same 18 percent over the next 10 years that Ryan’s budget would slash from all non-defense discretionary spending, which is the source of state and local grants.

These cuts would be in addition to the tight spending caps already set in place by the 2011 Budget Control Act and the cuts now going into effect under sequestration. Ryan’s plan would cut funding to state and local governments by three times more in 2014 than the sequestration cuts. As a percent of GDP, federal funding for state and local grants would drop far below historic levels, to half its average of the last 35 years by 2023.

The $301 million in cuts for the coming year could come from funding for Title 1 schools, special education, Head Start, housing and community development, WIC, clean water programs, mental health services, community health centers, workforce development, childcare assistance and public safety programs. One-fourth of federal non-defense discretionary funding to state and local governments is for education.

To put $301 million into perspective, Kentucky’s entire Cabinet for Economic Development budget for 2013 was less than one tenth that much. The $3 billion in cuts over the next 10 years do not even include cuts to the department of transportation, which nationally would total $139 billion over the next 10 years.

Nor do they include the extraordinary strain that Ryan’s plan would put on Kentucky’s economy and budget by cutting funding for Medicaid 31 percent by 2023 and repealing the ACA’s bargain Medicaid expansion. The Children’s Health Insurance Program (CHIP), a successful program providing health coverage to vulnerable kids, would be merged with Medicaid into a block grant that is not designed to grow at the rate expected health costs will grow.

It’s hard to tell where Kentucky would come up with the difference. Still suffering from the Great Recession and a slow recovery, the state would be forced to cut budgets even further than they have been in recent years, raise new revenue, or both.

Ryan’s budget forsakes essential investments in schools, roads and other critical services while at the same time including huge cuts in tax rates for high-income people and corporations. It’s a recipe for further harm to Kentucky’s economy and quality of life.

Comments are closed.