FRANKFORT, Ky. - Recommendations for overhauling Kentucky's antiquated tax code are on their way to the governor. One member of Governor Steve Beshear's Blue Ribbon Commission on Tax Reform hopes lawmakers see the report as an "opportunity" to make "historic changes in Kentucky's trajectory."

Jason Bailey, who is director of the Kentucky Center for Economic Policy, says the proposed reforms would make the income tax "somewhat fairer." Low wage earners would receive a refundable tax credit.

"So we're asking more of those who are more able to pay, for the most part."

Limiting itemized and retirement income deductions is part of the plan to raise new revenue for the state. About $500 million of the nearly $700 million in new tax revenue would come from changes to the income tax structure.

Bailey says that's a "key part" of reform because the state has suffered $1.6 billion in budget cuts in recent years.

"This doesn't even begin to make up for all of that, but puts us on a greater path. We have to be putting more money into education, into health care and human services, into other quality-of-life investment."

However, the commission's recommendations include around $100 million in corporate tax cuts. Brian Sunderland, with the Kentucky Chamber of Commerce, calls that "a big win" for business. Bailey claims it's "unnecessary."

"Business tax cuts are really a race to the bottom between states."

Instead, Bailey says, those taxes should be invested in education and infrastructure. Sunderland says the tax cut addresses an "injustice" to current companies who want to make more investments.

Modernizing the state's tax code has been talked about for years. Now that a concrete plan has been sent to the governor, what he and lawmakers do with it will be the real litmus test. Bailey hopes Kentucky's leaders step above "the influence of lobbyists" and their own short-term political concerns.

"This is a chance for them to make a difference that will help people's children, that will help their schools, that will help their economic future. And if they explain that to their constituents I think they can win their support."

Lawmakers return to Frankfort in January for the 2013 session.




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Ohio's teachers are applauding the governor's recently announced plan to overhaul the state's reading curriculum for elementary schoolers and boost resources for districts.

In his State of the State address this week, Ohio Gov. Mike DeWine also said he's directing resources to improve child well-being and mental health.

Ohio Education Association president Scott DiMauro said he supports a plan that helps kids succeed, but he also hopes the state Legislature will take a hard look at some of the education policies teachers believe are detrimental.

"And at the very top of that list," he said, "is repealing a provision currently in law that requires that students be retained if they don't pass a single test on a single day when it comes to the third-grade reading test."

The governor's plan provides funding to public, STEM and charter schools to pay for curriculum based on the Science of Reading, and for professional development for teachers who need it. Slightly more than one-third of all Ohio students are reading proficiently at their grade level, according to data from the Ohio Research Education Center.

DiMauro said schools are facing a crisis recruiting and retaining quality educators from diverse backgrounds. He said the Fair School Funding Plan - based on the actual cost of educating a child and developed in part by educators and school administrators - could help the state address the issue.

"Having a funding system that is based on the actual cost of providing a high-quality education to every student," he said, "and a formula that's updated to reflect the most recent information on what districts are spending in those areas."

Ninety percent of Ohio students attend public schools. The state spent more than $10 billion on primary and secondary education in 2021, and slightly more in 2022, according to state Department of Education data.

This story was produced in association with Media in the Public Interest and funded in part by the George Gund Foundation.

West Virginia lawmakers are clamping down on corporations trying boost environmentally and socially responsible investing. A new report by EcoConsult Solutions finds their actions will likely cost taxpayers at least $9-million, and perhaps as much as $29-million dollars annually. Senate Bill 262, passed last year, restricts the state from investing in companies deemed to be energy boycotters. Among those boycotted include BlackRock, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo.

Jim Kotcon, chair of the West Virginia Sierra Club, said restricting long-term financial investments in the form of bonds could end up costing residents and taxpayers by reducing the amount of money the state has for public services and programs.

"This appears to be an effort by the state government to help bail out the coal industry and to deny the real cost of climate change on West Virginia citizens," Kotcon said.

More than two dozen states are suing the federal government over a U.S. Department of Labor rule change on environmental, social and governance, or ESG, in workplace retirement accounts. The rule allows 401(k) providers to consider climate change and other issues when making investments.

Kotcon said environmental groups believe state investment funds should take into consideration environmental and social factors, especially since West Virginia communities are struggling to cope with increased flooding and extreme weather events driven by climate change.

"It has become sort of an extremist initiative," he said, "trying to penalize financial institutions that are attempting to do the right thing."

More than a dozen states so far have passed or have pending bills that would pull state funds from investments deemed to be adverse to the oil and gas industry, according to the report.

A Minnesota House committee heard testimony Thursday about the governor's proposed spending plan for education. As these talks unfold, public polling indicates voters want to see more dollars go toward improving public schools.

Gov. Tim Walz's plan calls for boosting the general education funding formula over the next two years and tying it to inflation, while adding more staff such as counselors and social workers.

State Education Commissioner Willie Jett touted the overall proposal during the committee meeting.

"We must never lose sight of the fact that a well-supported educator workforce is fundamental and critical to the survival of our schools, and the well-being and academic success of our students," he said.

Nationally, a new American Federation of Teachers poll found 66% of voters think the government spends too little on education, and nearly 70% want to see more funding. The governor's plan closely aligns with education priorities among legislative Democrats. Republicans, who are in the minority this session, have voiced concerns that too much surplus money would go to underperforming schools.

Minnesota is also looking at boosting unemployment insurance aid to include hourly school workers when they struggle to stay employed over the summer. Rep. Emma Greenman, DFL-Minneapolis, said it's encouraging to see more conversation about helping support staff.

"If your district is like my district," she said, "you're hearing a lot about the staffing shortages, about the need for 'paras' - I hear a lot about that from parents and teachers - about the bus driver shortage."

By "paras," she meant paraprofessionals who help in clasrrooms.

In the AFT poll, teacher shortages and unsafe campus environments were listed as among the most serious problems at schools. The survey was conducted in late December and included input from 1,500 registered voters nationwide.