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Group Questions Cuts in KY Lawmakers' Latest Budget

The budget approved by the Kentucky House calls for a 6.25 percent cut to most state agencies.(Mark Goebel/Flickr)
The budget approved by the Kentucky House calls for a 6.25 percent cut to most state agencies.
(Mark Goebel/Flickr)
March 5, 2018

FRANKFORT, Ky. — The two-year budget approved by the Kentucky House doesn't include cuts as severe as some other plans, yet some groups think it still leads the Commonwealth down the wrong path.

The $22.5 million spending plan calls for a 6.25 percent budget cut for most state agencies. It would raise new revenue from a cigarette tax increase, a tax on opioid drugs and the transfer of more than $600 million in dedicated funds.

Rosanne Klarer works on economic justice issues for Kentuckians for the Commonwealth. She said she thinks the proposal will lead to more significant budget cuts.

"We've had 18 rounds of budget cuts over the last 10 years, and that's really starting to hurt our programs, like schools and health care, preschools, the universities,” Klarer said. “There's a large structural deficit here."

Klarer contends lawmakers should consider comprehensive tax reform to fill the revenue gap, and close some of more-than 300 loopholes that result in billions of lost dollars. Her group also believes tax rates should be adjusted, so that wealthy Kentuckians pay the same share as low-wage workers.

Some lawmakers argue that tax breaks are good for the economy. But Klarer said there's no evidence to show that tax exemptions, credits, and exclusions are having the desired effect.

"Many of them are not reviewed for how effective they are at actually creating jobs or helping communities,” she said. “So, they need to review and monitor how these different things that we give out to groups, if they really do help us, or is it just a giveaway?"

As a retired Kentucky teacher, Klarer said she's especially troubled that the House budget trims more than $460 million from the Kentucky Employees Health Plan. That's more than double the amount the governor proposed.

"Money in these accounts should be spent on helping us shore up our pensions, and not using that money to balance the budget,” Klarer said. “It's going to be something where we're going to have to come back in a couple of years, and we're not getting at the root of the problem - which is that we need more revenue now, and we need to close tax loopholes."

Supporters note the plan fully funds state pension systems, invests in the rainy day fund and keeps the state debt percentage below 6 percent.

More information on the state budget is available at KYpolicy.org.

Mary Kuhlman, Public News Service - KY