February 7, 2009
Kentucky, like 44 other states, is facing a fiscal crisis. Revenue coming from taxes and fees is not enough to cover budgeted expenditures. By law Kentucky cannot do what most people do when faced with this situation which is borrow money. While this is probably a good thing, it means that Kentucky’s legislators have only two choices: cut spending or increase revenue.
Not every penny spent by Kentucky’s state government is essential. Governments are run by people, and people sometimes spend money on things we don’t absolutely need. When’s the last time you bought a candy bar or a soda? We all buy things we want that aren’t really necessary — sometimes things that are even bad for us. But state governments — Kentucky’s included — like us, spends most of its money on essentials, and budget cuts would hurt the essentials.
One of those essentials is education which accounts for nearly forty percent of total
Kentucky state spending. Kentucky lags behind much of the U.S. in many areas of education already. In 2004, while less than 15 percent of people over 25 in the country as a whole had not graduated from high school (or gotten a GED), more than 18 percent in Kentucky has failed to attain that important milestone. The gap in college attendance is even greater. In the U.S. as a whole about 28 percent received bachelors degrees or higher, while in Kentucky only 21 percent had done so. Education is clearly not an area that can tolerate cuts if Kentucky wants to compete with other states and other countries for businesses and jobs.
Another essential area is transportation that commands nine percent of the annual budget in the Commonwealth of Kentucky. This has to cover all aspects of transportation from road, bridge and airport construction to maintenance and repair and snow removal. Most people would certainly consider the criminal justice system — law enforcement, courts, prisons and probation to be essential expenditures, another five percent of the total budget.
Most people are aware of the role of state governments in education, transportation and criminal justice, but they often unaware of other essential state expenditures. Another kind of essential is the state funds given to communities for water and sewer, equipment and training for fire and rescue, flood control and stream improvement, water safety testing, and infectious disease control. If residents of Kentucky were to go to their local fiscal court, town or city council, and ask, I’m sure they’d learn that their local governments depend heavily on funds from Frankfort to provide services and infrastructure necessary for safety, security and health in local communities.
Most people often do not think about the fact that state funded licensing boards to insure the quality of service people we depend upon daily – doctors, nurses, dentists, counselors, barbers, hairdressers, pharmacists, engineers and many others. The news stories about salmonella in peanut butter illustrate what can go wrong when a state (in this case Georgia) does not spend enough on adequate safety testing and enforcement of food safety standards.
The real solution to the crisis is to raise revenues, by raising taxes. In the short run this probably means raising taxes on tobacco products. Kentucky under taxes cigarettes compared to most of the states surrounding it. The increased cost would not only raise revenue, but would encourage more people to quit. But it is a tax that hits low income people harder than others. In the long run the overall structure of taxes in Kentucky needs to be modernized. More tax money has to come from those with the ability to pay more, both in taxes on luxury and business services, reinstating the inheritance tax, and more progressive income tax that raises, slightly, the percentage paid by those with the highest incomes, such as proposed in both Kentucky HB 223 and HB 257.
Currently, Kentucky income tax is essentially a flat tax of 6 percent on all incomes over $8,000. HB223 proposes that individuals (NOT families) with incomes over $75,000 pay an extra 1% (7% instead of 6%) only on the proportion of income that exceeds $75,000 up to $90,000, and individuals with incomes in excess of $90,000 pay an extra 2% (8% instead of 6%) only on the portion of income that exceeds $90,000. In
Kentucky all earners pay tax individually even if married — married couples file separately but on the same tax form. This bill would NOT affect families with incomes of more than $75,000 as long as each individual person’s income was less than $75,000. Indeed, families with two earners each making $74,000 (a family income of $150,000) would not be affected by this bill. An individual with an income of $100,000 would pay an extra 1% on the $15,000 between $75,000 and $90,000 (that’s an extra $150 dollars), and an extra 2% on the $10,000 between $90,000 and $100,000 (that’s an extra $200 for a total of $350 dollars more than they would be paying under the current tax system).
This does not seem like an unreasonable cost given all the benefits and services that we all gain from state government. When people think about who benefits from state spending they almost exclusively focus on the poor. But affluent people benefit as much or more from government spending. Affluent people travel more making more use of highways and especially airports, they make more use of libraries and parks, more likely to go boating on Kentucky lakes. Even if the affluent do not make direct use of public schools, colleges and universities (although a high percentage do), if they are business owners or managers their success in business depends upon subordinates and workers educated in public schools.
The irony is that even the benefits that people identify as “going” to poor people, actually go to middle class and affluent people. Take Medicaid. Poor people do benefit from having a medical card. They receive medical services and medicines that can save their life and keep them healthy. But the poor do not get any money from Medicaid — the money goes to hospitals, doctors, home health companies, and pharmaceutical companies — in other words to middle class, affluent and even to rich people (stockholders and executives in medical and pharmaceutical corporations). The majority of money spent on social services doesn’t go to poor people, it goes to middle class social workers, therapists, psychologists and other people with graduate educations. It pays the fees, their salaries and their health insurance and pension payments of these middle class workers.
The more affluent you are the more your lifestyle and your economic position depends upon publicly funded resources. So what not pay a (very) small premium for those benefits?
Posted in KY Budget Cuts, Tax Reform, KEJA Blog 
No Comments »
July 15, 2008
The Lexington Herald-Leader today reported that a site has been chosen in Pike County, Kentucky, for a $4 billion coal-to-liquid plant. The announcement came as the result of a $850,000 study by Pikeville-based Summit Engineering, paid for by the Kentucky Department of Energy and the Appalachian Regional Commission (tax money).
The proposed facility is slated to produce 50,000 barrels of liquid coal a day. The county would use federal and state grant money (tax money) to put the basic infrastructure in place, including water and sewer, and the company chosen to operate the facility would pay for the rest. Pike County officials have already received several proposals from interested companies.
Coal-to-liquid conversion uses a process that heats coal to 1,000 degrees Fahrenheit and mixes it with water to produce a gas, and then converts the gas into diesel fuel. Roger Ford, director of energy and technology for Pike County, estimates that the direct operating costs (raw materials, labor, energy, ordinary overhead) of transforming coal to liquid at the Pike County facility would be about $61 a barrel.
The article goes on to say that those who oppose the project are concerned:
“that liquid coal could contribute to global warming, citing researchers who say the process produces nearly twice the greenhouse gases that gasoline does, pumping carbon dioxide into the air — both when coal is turned into liquid, and when that liquid is burned in vehicles.
They also fear coal-to-liquid plants would result in more strip mining and mountaintop removal, devastating surrounding environments. If liquid coal were to account for a 10 percent displacement of current oil use, coal mining would have to increase by 43 percent, some researchers have predicted.”
As someone who sees, every single day, the devastating effects of current strip-mining in the region, I also have concerns about how increasing demand for coal would affect not only this region, but all urban areas down stream (in Kentucky, West Virginia, and Virginia), that depend upon rivers for their urban water supply.
Strip-mining is not accomplished without the removal of forests. Not just the removal of trees, but the removal of complex, interconnected, dynamic ecosystems called forests; forests that serve a whole host of essential functions, both locally, regionally, and through the entire biosphere.
Locally there is the loss of habitat for everything from insects to elk and black bear. Community leaders in eastern Kentucky keep talking about making the region a recreation and tourist destination, and have participated in expensive programs to re-introduce elk to the region, and promote hunting, only to turn around and encourage economic activities that destroy the regions scenic, hunting and recreational resources.
Locally there is the increasing threat of flash flooding. Locally and regionally there is the loss of forest sink properties that help clear the air of particulate pollution (not to mention absorb CO2): forests also contribute to atmospheric moisture through plant aspiration, thus maintaining normal rainfall patterns and avoiding both drought and cloudburst. Regionally forest help regulate the flow of water in streams and rivers, allowing for longer, higher sustained flows necessary for a reliable urban water source.
I also have to wonder about how knowledgeable Pike County’s decision-makers really are when it comes to issues that could affect the atmospheric chemistry, given the ignorance evidenced in a statement by Pike County Judge-Executive Wayne T. Rutherford. Rutherford said “Our goal is to not put anything out in the ozone.”
Photo: Mountaintop removal strip mine in Letcher County, KY; Copyright by Sue Greer-Pitt, June 2008
Posted in KEJA Blog No Comments »
June 24, 2008
Because of state budget cuts, the Kentucky Community and Technical College System eliminated 240 jobs, including 166 full-time faculty and staff positions.
From the Lexington Herald-Leader:
KCTCS President Michael McCall said the job cuts will be “spread pretty evenly across the state” and will affect all 16 KCTCS colleges…
KCTCS is dealing with a loss of $13.5 million caused by two 3 percent state budget cuts this year. By job category, the cuts involve: 97 full-time faculty; 69 full-time staff; 43 part-time faculty; and 31 part-time staff.
Initial predictions were that as many as 6,000 KCTCS students might not be able to get the courses they want in the upcoming school year because of the budget cuts…
Most KCTCS students will find fewer courses offered, fewer sections of courses, bigger class sizes, and by 2009-10, the elimination of programs that enroll or graduate few students.
This fall, KCTCS in-state students will pay an additional $180, or 5.2 percent, in tuition, bringing the annual total to $3,630.
KCTCS had sought a 13 percent tuition increase for the new fiscal year, which starts July 1. That request was cut by more than half by the state Council on Postsecondary Education.
Posted in KY Budget Cuts, Education Funding, Kentucky General Assembly, Advocacy, KEJA Blog 1 Comment »
June 6, 2008
From the KFTC blog…
A Letter to the Editor and an article worth noting, both underscoring the irresponsibility of the current budget. Below is a KFTC member’s call for tax reform that offers access to higher ed, and an article that shows how chronic underfunding of the Cabinent of Health and Family Services has compromised our ability to protect some of the state’s most vulnerable.
Amar Shah’s Letter to the Editor in yesterday’s Courier-Journal. Shah is among the U of L students building support for affordable higher education.
Taxes and tuition
“Crit Luallen’s opinion piece on the exorbitant costs of higher education in Kentucky could not be any more relevant. As she notes, Kentucky is among the least educated states in the nation and desperately must catch up. Luallen reports that tuition at our four-year institutions have risen by 96 percent over the past six years, forcing a massive decrease in enrollment. These tuition increases can be attributed to, at least in part, a refusal of our state government to raise the revenue badly needed to support higher education.
Luallen’s figures demonstrate that the shortchanging of public higher education in Kentucky has been an ongoing trend, but our current governor and legislature must do everything in their power to reverse it. Simply put, raising revenue means raising taxes.
In this state, the wealthiest pay a smaller proportion of their income in taxes than do those who are merely eking out a living. In the end, it is the students who pay, in the form of sky-high tuition, as universities look for ways to shore up their budgets.
As a student at the University of Louisville, I challenge the readers of this newspaper to quit harking to the fear-mongering of anti-tax rhetoric and admit that the only way to an educated Kentucky is through economic justice and tax reform. Only when the state government has the guts to raise taxes on the wealthy will our public universities secure the funding necessary to ensure that higher education is affordable for all.”
AMAR SHAH
Student
University of Louisville
Louisville 40217
And here is an article in the Herald-Leader about the effects of chronically underfunding the state wards, which care for the 2500 Kentucky adults who are unable to care for themselves. Notice the incredible caseloads pointed out (and bolded) in the excerpt below:
Luallen said in an interview that the problems are not indicative of the quality of the employees hired by the state to handle guardianship cases.
‘These are committed, caring workers who are doing the best they can.’ The problem, she said, is that there are too few of them.
A national study issued in 2005 recommended a ratio of one worker per 20 wards. As of last year, Kentucky averaged one case manager for each 58 wards, the audit found. Since then, caseloads have increased to an average of one worker per 61 wards.
All this, and the Senate President isn’t convinced that anyone is being cut to the bone. These pieces, along with all the other calls for strengthening our investments our commonwealth, are cases for more inclusive, more participatory government, with elected officials who truly represent Kentuckians. What are your thoughts?
Posted in KY Budget Cuts, Education Funding No Comments »
May 31, 2008
The Department of Public Advocacy, which houses Kentucky’s public defenders, has responded to its shoestring budget by making a decision to refuse cases as of July 1. That’s when the agency’s $2.3 million budget cut provided by the General Assembly kicks in. They will no longer take domestic violence cases, child support cases, truancy cases, cases dealing with treatment for the mentally ill, and other family court cases.
In an article in The Courier-Journal, Ernie Lewis, who oversees the department and who has been calling attention to the need for more adequate funding, explains that this was the only option for public defenders, given the increase in caseloads and the chronic lack of adequate funding: “Kentucky has to decide, do we want to continue to arrest people and charge them with crimes? If we do, we have to provide counsel for them. It’s as simple as that.”
This news follows the heels of the closing of a mental health facility in Louisville, of tuition increases that compromise access to college across the state, and of school lunch assistance being taken from children who need it — all because of this “tightening the belt” budget.
Meanwhile, Senate President David Williams is defending the renovations to the Senate offices — kitchens for the caucus rooms, a senate lounge, etc. When asked about the need for these renovations in the face of such a dire budget, “Williams denied that state budget cuts are inflicting real pain. Regarding the Health and family Services Cabinet and the Justice Cabinet, both of which are reporting sweeping program cuts, he said, ‘You’re talking about people who you couldn’t print enough money for. I don’t accept the premise that they’re cutting anything to the bone.’
What do Kentuckians think of this? Bluegrass Roots is collecting names of people who are calling on Williams to sell his flat-screen TV to fund KCHIP. And one member of Kentuckians For The Commonwealth, Erik Lewis, responded this way:
My wife worked in a mental health facility, and the carpet in her office hadn’t been replaced in decades. Mental health is one of the areas that is chronically underfunded; the facility’s shoestring budget wasn’t even enough to hire an adequate number of caseworkers, let alone to redecorate.
After the budget cuts were announced in April, she was laid off for reasons driven forward by those cuts. The Senate’s redecorating would probably have funded her salary for a year. Senator Williams wouldn’t stand for working in the conditions he foists on many state workers. When he talks about “those people,” he’s talking about people who are trying to keep this commonwealth patched together.
If Senator Williams is really intent on belt tightening, he should start with his own. It is good governing that creates efficiencies; tight budgets only create pain.
Posted in KEJA Blog No Comments »
May 4, 2008
Editorial in Lexington Herald-Leader:
PSC funds diverted from planned use:
Every month when you pay your electric, gas and phone bills — and in Lexington, your water bill — part of the money goes to the state agency that polices the utilties that provide those services.
You support a staff that investigates consumer complaints against utilities and makes sure they don’t overcharge customers.
It was a pretty good deal until, without your knowledge or consent, a big chunk of the money you pay was diverted by the legislature into the General Fund to balance the state budget.
As a result, the state Public Service Commission won’t be able to do as good a job as it should, and you won’t get your money’s worth.
It’s quite outrageous that consumers were cheated this way by a legislature that ducks the hard decisions needed to balance the budget.
The PSC lost about a fifth of its operating budget or $5.5 million over the next two years, reports Deborah Yetter of The Courier-Journal.
That’s a drop in the bucket of the state budget but devastating to an agency that has such an important job.
Now the PSC is faced with the choice of charging consumers a higher surcharge or under-serving the public and dragging out rate cases and other decisions on which utilties depend.
This isn’t the first time the PSC has been raided to balance the budget, but this is by far the deepest cut the agency has sustained.
This legislature also raided about $11 million in fees paid by professionals to their licensing boards, making it harder for nurses, doctors, pharmacists and real-estate agents to police their own ranks.
Throughout state government, arcane agencies play little known roles in protecting the public. And they’re all being cut to the point where they won’t be able to do their jobs, which will inevitably produce tragic stories of people harmed physically and financially…
Posted in KY Budget Cuts, Kentucky General Assembly, Tax Reform, Advocacy, KEJA Blog No Comments »
May 4, 2008
From Deborah Yetter, Louisville Courier-Journal:
In a move that could affect consumer protection in Kentucky, lawmakers are taking about $5.5 million from the state Public Service Commission — money that comes from fees customers pay on services such as gas, electricity, water and telephones.
Critics argue the cuts, meant to help balance the state budget, will be difficult for the agency, which handles consumer complaints, investigates and holds hearings on rate requests and monitors utility companies. The PSC is already understaffed and struggling under a growing workload.
“I do know their staff is razor thin,” said Ron Sheets, executive director of the Kentucky Association of Electric Cooperatives. “You’re taking away a level of protection that is now afforded by state government.”
…The maneuver to get money from the PSC is one of many lawmakers used to balance the budget in the legislative session that ended April 15. In a similar move, lawmakers scooped up about $11 million from fees professionals pay to operate their licensure boards and commissions, prompting protests by nurses, psychologists and others who must pay annual licensing fees.
Taking funds ‘a little unfair’
Critics point out that the PSC funds come from customers and, by law, are meant to pay to run the consumer protection agency.
“I think it is a little unfair,” said Larry Hicks, chief operating officer of Salt River Electric Cooperative in Bardstown. “That money was ultimately paid by the ratepayers, and the PSC looks after their interests.”
East Kentucky Power Cooperative President Bob Marshall said his company opposes the move.
“We want the money to be used for Public Service Commission activities and not being diverted for the general fund,” he said.
Lawmakers who helped draft the budget say they sympathize — but without new revenue, they say they were forced to scour agencies for all available funds.
“We’ve just got to turn over every rock and come up with every dollar we can,” said Sen. Charlie Borders, R-Russell, chairman of the Senate budget committee. “It’s just something we have to do in these tough times.”
The House, led by Democrats, had proposed new revenue, including a 25-cent increase in the state’s 30-cents-a-pack cigarette tax. But the Republican majority in the Senate rejected any new taxes.
Sen. Tom Buford, R-Nicholasville, a member of the Senate budget committee, voted for the budget but said he didn’t like taking money from the PSC.
“I regret that immensely,” he said. “But I understand we were not going to raise taxes. We just had to draw the revenue from everywhere.”
Buford said he doesn’t disagree with critics who say the budget was patched together with one-time funds and by raiding boards and agencies that generate their own money.
“It absolutely is,” he said. “There is no way to deny that.”
Rep. Jim Wayne, D-Louisville, one of 21 House members to vote against the budget, said the PSC situation underscores the flaws in the budget.
“It’s another example of the legislature being irresponsible,” he said. “We can’t keep doing this.”
Posted in KY Budget Cuts, Kentucky General Assembly, Tax Reform, Advocacy, KEJA Blog No Comments »
May 4, 2008
Righteous letter in 5/2 Lexington Herald-Leader:
Here’s something you might find hard to believe. In economics, it’s apparent that lower taxes do not cause long-term economic growth. This is nothing new. Economists have known about it for a long time.
Essentially, tax cuts stimulate the economy with extra cash for a while. This effect doesn’t last long because eventually we’ll have to pay our debts.
This year, you will hear many politicians in Kentucky say that economic growth depends on low taxes. That idea is obviously very popular with the public and it helps politicians win elections.
But it’s too good to be true in the real world where you get what you pay for.
Factors that actually do produce long-term growth are technological advances, highly trained workers, a healthy populace, private and public investments, political stability and extensive infrastructure. As you can see, some of these factors require higher taxes.
The real challenge is to find our optimum tax level; which yields plentiful markets today and ample investment in our future.
Tom Louderback
Louisville
And an interesting comment on the federal budget:
Unbalanced spending
With reference to the Herald-Leader’s coverage of tax day, I hope the paper will tell its readers that 43 cents of every tax dollar they pay for 2007 goes to the military, according to calculations by the Friends Committee on National Legislation.
In contrast, the government spends just one cent of every tax dollar on preventing wars. This spending is out of balance with my priorities.
We should all be urging our elected representatives in Washington to invest more money to prevent wars, protect the environment, educate our children and make sure that people in this country have adequate health care.
Randy McMillan
Lexington
Posted in KY Budget Cuts, Kentucky General Assembly, Tax Reform, Advocacy, KEJA Blog No Comments »
April 29, 2008
Strong and heartfelt Op-Ed by Rep. Darryl Owens in Sunday Lexington Herald-Leader:
Thank Senate leader for terrible budget:
Already the pain and suffering caused by the General Assembly’s passage of the state budget this month is being felt across Kentucky.
Budget cuts in public schools are predicted to cause layoffs and jeopardize essential programs for our children.
Public universities are increasing their tuition up to 9 percent, putting an additional financial burden on parents and students already struggling with the skyrocketing cost of higher education.
The public defender office is forced to cut 54 positions, which will leave many vulnerable people without proper representation mandated by the U.S. Constitution.
And in Louisville, it was announced that Seven Counties Services is closing its southeast Jefferson County office, which serves 1,500 people with mental health problems.
It didn’t have to be this way.
The House had a plan that would have generated millions of dollars in additional revenue. We wanted to fully implement our plan to restructure the state bonded indebtedness, which would have brought in $300 million.
The Senate agreed only to a third of that.
We offered a modest increase in the cigarette tax — from 30 to 55 cents — which would have brought in $100 million. Polls told us that this small increase had bipartisan support and that it was small enough that it would still have been lower than the taxes levied by surrounding states.
The Senate refused to consider this measure.
We wanted to add sales tax on several services — such as limousine, air-charter and armored-car services — which would have provided $70 million over the next two years.
Again, the Senate refused.
Ultimately, the House had to make a crucial decision. Do we walk away and not provide any services to Kentuckians or do we try to negotiate with the Senate to get the best budget we can for our citizens?
The House leadership chose the latter and helped craft the budget under which we all must now live.
I applaud the hard work, patience and energy the House leadership put into the budget negotiations. I was able to observe some of the budget negotiation process and was proud of our team.
They tenaciously tried to negotiate a better, fairer budget that would improve the quality of life for Kentucky citizens even in these tough economic times. But they could not penetrate the force that is Senate President David Williams.
And that’s who should bear the brunt of the pain and suffering caused by this terrible budget.
It is no secret that Williams is the Decider in the Senate. Once he makes his decision, the overwhelming majority follows in lockstep.
Others have called House leadership dysfunctional.
I would submit that the House leadership’s style — which encourages debate, open conversation, exchanging of ideas and issues — is the antithesis of dysfunction and, in fact, mirrors the true essence of the democratic process.
It is the Senate — where disagreement, debate and free flow of ideas are stifled, even prohibited by Williams — that more correctly defines dysfunction.
In the end, so that Kentucky would have a budget, many House members voted for its passage.
I did not.
I could not in good conscience vote for a budget that was going to do so much harm to so many lives.
This budget takes significant steps backward when it comes to our schools, services for Kentucky’s sickest and poorest citizens and overcrowded jails and prisons.
There will be more heartbreaking news as the full impact of the budget is revealed in the coming weeks and months.
I hope the Senate Decider can sleep nights knowing that so many Kentuckians are suffering at the hands of this budget.
I know I won’t.
Posted in Education Funding, KY Budget Cuts, Kentucky General Assembly, Tax Reform, poverty, Advocacy, KEJA Blog 1 Comment »
April 29, 2008
Excerpts from a Lexington Herald-Leader opinion piece by KYA Director Terry Brooks:
This year’s General Assembly passed some good bills — such as booster seats, dental screenings and anti-bullying — for kids. However, the budget it passed is a disappointment for Kentuckians and reflects an unwillingness by leadership to take strong steps to address long-term budget issues.
To believe that the budget Kentuckians have been dealt is the best we could hope for is to give legislators a free pass for their dereliction in the handling of the state’s public affairs. Instead of rallying to address Kentucky’s economic woes and to move the state in a direction where it can sustain funding for its core program responsibilities, the legislature caved in to political shenanigans at taxpayers’ expense.
It’s hard not to focus on the flat funding and cuts to programs such as child care and public health that will have long-term effects on the state However, Kentuckians must also look ahead to the next budget session and make our expectations clear…
The General Assembly must increase revenue.
Once again, legislators took the easy path when it came to addressing revenue shortfalls. It is easier to tell vulnerable Kentuckians to tighten their belts than to enact a budget with fair, sustainable and adequate revenue sources. That is political expediency; it is not leadership.
We recognize that there are strong and very well-funded forces that oppose any tax even though these same people benefit from the public structures of transportation, law enforcement and public education. “No-tax” pledges make for appealing re-election slogans.
However, legislators must recognize that increased revenue is essential if Kentucky is to compete in the 21st century.
In an address to Congress in 1862, President Abraham Lincoln asked, “Still the question recurs, ‘Can we do better?’ … We must think anew and act anew.”
We challenge Kentucky’s legislators to heed that call. Thinking and acting anew begins with the courage and commitment to increasing transparency and revenues.
Posted in KY Budget Cuts, Kentucky General Assembly, Tax Reform, Advocacy, KEJA Blog No Comments »
content rss
Recent Comments