Lawmakers face ‘stark choice’ in next budget

Greg Stotelmyer Kentucky News Connection

January 8, 2014

FRANKFORT — 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.”