Bevin should be working on fair tax reform
Published 8:06 am Tuesday, October 24, 2017
In February 2017, Gov. Bevin gave a “State of the Commonwealth” address in which he made promises to fix our tax system and stated the commonwealth would face dire financial straits if tax reform wasn’t tackled at the same time as shoring up the pension systems. I quote, “This is not going to be a tax-neutral tax plan. We can’t afford for it to be.”
Now, tax reform has seemingly been “scrapped” but dismantling the pension systems for state employees, first responders and teachers is “front and center” along with the possibility of a special session costing taxpayers $65,000 PER DAY!
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Why do I care about this issue? I worked my entire 30-year career in the Danville public schools as a speech-language pathologist. Not a classroom teacher, but I contributed to and receive my pension from the Kentucky Teacher Retirement System. I also started a 401(k) savings plan before I retired, which, like my contribution to KTRS, was deducted from each pay check.
I retired in 2006. When the financial crisis of 2008 hit, I was extremely grateful for that KRTS pension because my 401(k) was wiped out! If the 401(k) had been my only source of retirement income, I would have had to declare bankruptcy. The 401(k) savings account was never designed to replace a pension but to be an additional source of retirement income.
West Virginia converted their teachers’ defined benefit pension system to a 401(k) type in the early 90s. It was such as miserable failure that the state reinstated the defined benefit pension plan in 2008. Can we not learn from their mistakes?
Why is Gov. Bevin refusing to consider fair tax reform to bring about new revenue streams? Kentucky gives away $13 billion a year in tax credits and incentives, which is more than tax revenues received! That is unsustainable!
Tax incentives have been shown not to be the overarching reason that corporations choose where to locate. Businesses look more at quality of life issues such as good education, good health care and a trained work force. How can gutting the pension systems for teachers, state workers and first responders possibly make Kentucky’s quality of life more appealing?
Jane S. Brantley