Fixing state finances requires new revenue

Published 11:20 am Monday, February 5, 2018

Dear Editor,

As a public employee alarmed by the erosion of retirement benefits, I set about to educate myself on how Kentucky finances got in this mess and the best way to get out of it. I attended a workshop presented by the Kentucky Center for Economic Policy. This is not affiliated with any political party. I wanted statistics and facts, not political ideology, to inform me.

I found that the situation is like household finances. Kentucky has been spending more than it is taking in. Heretofore, past legislatures and governors have relied on cutting budgets and shifting money from one seemingly healthy fund to another which badly needed it. This has worked in the short term, but time has now run out. There is little left to cut and no truly flush fund from which to borrow.

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This is not just self-interest talking. Kentucky received an ‘F’ in Education Week’s 2017 Quality Counts report for education spending, 37th in the nation. In 2015, Kentuckys community colleges were ranked as having the highest tuition in the southern region, with tuition more than $1,000 above the national average. Our state has been ranked as having the 11th highest community college tuition in the nation. We are also 11th in the nation in the number of working-age citizens without a high-school diploma or equivalency. According to AARP, we are dead last for the quality and availability of long-term health service support. Despite having the nation’s third-highest rate of death due to drug overdose, Kentucky has the fifth-lowest state mental health expenditures per capita among the states. We are the second-worst in the nation for the high share of state and federal inmates in local jails (2014 statistic). In 2016, Kentucky had the second-largest share of children coping with an incarcerated parent. Currently, Kentucky has more than 1,100 structurally deficient bridges and more than 3,700 miles of roads that need significant repairs. Finally, Kentucky’s overall poverty rate of 18.5 percent makes it the fourth-poorest in the nation.

Financial gurus like Suzy Orman suggest that when in debt, a person must cut spending and increase revenue, maybe by getting a better-paying job. The obvious long-term solution must include both approaches. Yet searching for new revenue is unpopular in Frankfort. Politicians are afraid to alienate potential financial backers and voting blocs by increasing revenue. But by cutting services, they are basically creating a backdoor tax on only a segment of the population. This is sold under the guise of cutting waste.

Now, none of us want someone in government to waste our hard-earned money. We might do that ourselves, but we don’t want someone else to do it. We also want our taxes to be fair. If we have to pay, we want everyone to pay their fair share as well. If our work dollars are treated respectfully, spent wisely and gathered fairly, the public will understand the process needs revamping. After 30 years, our world has changed. It is past time to revamp our state’s revenue sources. Bless their hearts, our legislators seem afraid to do that. Let’s encourage them to deal with tax reform.

Jane Preston