FRANKFORT, Ky. - Kentucky lawmakers can take either a path of reinvestment or retrenchment when they craft a new two-year budget, according to economic policy analyst Jason Bailey, who calls the decision a "stark choice." He is co-author of a new report, from the Kentucky Center for Economic Policy, which he directs, that says the direction the state heads depends on whether lawmakers find new ways to generate more revenue.

"The conversation about tax reform in the state has been happening for several decades now," Bailey said. "We have studies on the shelf showing how to do it; we just need legislators with the will to move forward on it."

Bailey was on the governor's tax reform commission which released a plan last year that outlined how to broaden the state's tax base by $650 million. The main idea is to eliminate some of the many tax exemptions and loopholes.

Bailey remarked that there's pain from 13 rounds of cuts over the past six years, and more pain is ahead if something isn't done to reverse course.

"We're at a turning point," he declared. "Those cuts have eliminated $1.6 billion in funding for schools and for health care and social services. Those things have set us back."

And the economic policy analyst warned that the state has already "pulled every trick it can find" to limit just how deep the budget cuts have been.

"You know, we've done tax amnesty, forgiven people for not paying their taxes," he recounted. "We've pulled money from various funds across the state. We've restructured state debt which ends up just costing the state more over time. We haven't paid pension payments for employees."

Those are all reasons why the report Bailey co-authored calls for lawmakers to find ways to, in his words, "put more money on the table."

A link to that report is at KYPolicy.org.




get more stories like this via email

Wisconsin is one of 33 states allowing Social Security benefits to be extended to teachers.

As the future of the program is debated, a retired educator said keeping certainty in place is crucial if the country doesn't want more people leaving the profession. On the campaign trail, some Republican candidates have floated ideas opponents argued would either cut or eliminate the program.

John Bigley, a retired eighth grade science teacher from the Rhinelander area, said he earned a pension, but he added the extra help from Social Security payments makes retirement less challenging financially, especially during a period of high inflation.

"We have what we have right now, and it's keeping our head above water," Bigley acknowledged. "We don't have a lot of stress."

But he worries about recipients who do not have other retirement savings. Bigley added threatening to reduce benefits does not help to retain teachers during a national shortage of educators.

Sen. Ron Johnson, R-Wis., is among those suggesting program changes. He defended his approach by saying he wants to move it to discretionary spending to enact needed reforms.

Alex Lawson, executive director of Social Security Works, said older Americans are especially feeling the weight of higher-consumer costs. He argued retired teachers are among the many individuals who deserve to keep the earned benefit after devoting their life to a certain profession.

"We need to pay teachers more, I'll say that, across the board," Lawson asserted. "But at the same time, we need to ensure that every teacher who's paid into the system, that they don't have to be scared that some politician is going to reach into our pocket and take our benefits away."

Teacher advocates pointed out teachers also face less job security, as school districts struggle with budget issues of their own. They contended what teachers earn through Social Security will at least be there if they do not stay on long enough to secure a pension.

It's estimated only one in five teachers in the U.S. go on to receive their full pension benefits.

Average Affordable Care Act premiums in Wisconsin would have been 56% higher this year without temporary subsidies from the federal government, and small-business advocates say a new extension is a big help when smaller firms are trying to get back on their financial feet.

The Inflation Reduction Act included a provision to extend the ACA's premium subsidies through 2025. The extra tax credits are from an earlier pandemic relief package and were set to run though this year.

David Chase, vice president for outreach at the Small Business Majority, said the extension removes a lot of headaches during a complicated time for owners of smaller operations.

"Only about half of small businesses are able to offer coverage," he said, "and we've seen that number drop even more since the pandemic, which makes the Inflation Reduction Act even more important."

Since its inception, Chase said, the Affordable Care Act has been a game-changer for small businesses but acknowledges owners still face challenges. He said health-care costs continue to rise, with one recent analysis noting marketplace insurers already were proposing premium hikes for 2023. Policy experts have said the subsidy extension will help buffer those higher expenses.

Shawn Phetteplace, the Wisconsin-based Midwest regional manager of the Main Street Alliance, said the extension is especially helpful here, because Wisconsin is still among the 12 states that have yet to expand Medicaid under the Affordable Care Act. He said that adds barriers for small business owners trying to build a staff these days.

"A lot of folks go and do jobs - that they're working for large corporations purely to get health insurance," he said. "You have folks who don't start a business because they need health insurance. You have folks that only are part-time with their business because they need health insurance."

The Inflation Reduction Act also will allow Medicare to negotiate some drug prices. Analysts have said that also could help small business owners in the future, because skyrocketing prices have made it harder to select a plan to offer to their staff.

Childhood poverty was cut nearly in half during the Covid pandemic due to expanded federal programs like the child tax credit, and stimulus payments, which also prevented some five million Americans from falling below the poverty line.

Advocates for the poor argued those gains are already being lost since the most helpful programs were not extended, and high inflation is now impacting families as well.

Joe Diamond, executive director of the Massachusetts Association for Community Action, a coalition of some 23 community action agencies, said advocates are using lessons learned during the pandemic to help improve peoples' lives.

"We were inspired by the resilience of the people that we served, and we also were inspired by what we found to be the effectiveness of the programs that were able to run during the pandemic," Diamond remarked. "We know that our mission now also includes doing our very best to sustain those programs and to continue to work as hard as we can towards of our goal of reducing poverty."

Advocates suggested strategies could include the creation of a state-funded child tax credit, providing an adequate guaranteed income, and supporting extensive outreach to ensure every family receives the benefits they need, and to which they're entitled.

Tax reform and public benefits are not the only answer.

Nancy Wagman, research and Kids Count director at the Massachusetts Budget and Policy Center, said people need good jobs, with growing wages.

"People who are poor are largely working," Wagman pointed out. "They're just working at jobs that either don't pay enough or are unstable, unpredictable hours, those sorts of things. So the kinds of policies that help support work for workers really can make a difference."

Wagman has updated a pre-pandemic report on the challenges faced by poor people in Massachusetts due to historic underinvestment in public transit, quality child care and affordable housing; challenges only made greater by the pandemic and institutional racism.

For example, Black veterans of World War II were denied the G.I. Bill, and today, Black workers and those of Latin descent have a harder time breaking out of low-wage jobs.

Wagman contended the state can play a crucial role in ensuring barriers to opportunity are dismantled, by revising the tax code, so as not to primarily benefit those on top.

Meanwhile, the need for help remains critical for people living on the margins. The coalition is hosting its first in-person gathering since the start of the pandemic today. They say member organizations are excited to implement the lessons learned these past two years, and they are even more committed to the challenge of ending poverty.

Laura Meisenhelter, executive director of North Shore Community Action Programs, said the need for help has only increased since federal pandemic aid ended.

"We've given out more gas cards to help put gas in their car, and gift cards to grocery stores, so they can feed their families," Meisenhelter outlined. "We've done that more than we ever have."

Anti-poverty advocates are honing in on Essex County, the state's third most populous county, and focusing on the challenges there related to housing, food insecurity and job development. They hope their work will serve as a model for other counties going forward.

Beth Francis, president and CEO of the Essex County Community Foundation, explained they are one of many charitable organizations supporting such efforts.

"These community action agencies are in all across the Commonwealth, and they do vitally important work," Francis stressed. "We are proud to fund them, and they work with our most vulnerable families and I think they need to have a little light shed on them."