Details are beginning to emerge from Kentucky’s $20.3 billion budget — largely cooked up behind closed doors—and they include some nasty surprises.
In final negotiations, lawmakers cut $840,000 from Louisville’s Waterfront agency over the next two years, which shocked Waterfront officials and likely will force the cancellation of key community events such as the annual Fourth of July celebration.
Meanwhile, they found room in a revenue bill to give generous tax breaks to Louisville’s downtown Whiskey Row project, the alcoholic beverage industry, the film industry and new business investors, The Courier-Journal’s Tom Loftus reported last week.
Some of the last-minute changes were decided behind closed doors of a legislative conference committee.
And now that the results are public, it is clear lawmakers have produced a go-along, get-along budget that does nothing to address the critical funding shortfalls in key areas or dig Kentucky out of the budget rut it’s been in for years.
“It’s cuts and credits, more of what the legislature has done for decades,” said economist Jason Bailey, director of the Kentucky Center for Economic Policy in Berea. “It eats away at revenue needed for schools, human services. It’s the same behavior that led to problems with our tax code that produces woefully inadequate revenue to meet the state’s needs.”
State Rep. Jim Wayne, a Louisville Democrat, said his biggest disappointment is that legislature largely ignored findings of a statewide tax commission appointed by Gov. Steve Beshear that offered a combination of tax cuts and new taxes that would have raised up to $659 million in revenue.
“So we end up with a budget that is pitiful,” said Mr. Wayne, who along with Mr. Bailey served on the tax commission that included business leaders, public officials, human service advocates and others who advocated a major overhaul of the state tax system.
The two-year budget approved March 31 includes no revenue to offset tax breaks that will amount to $29 million a year once fully implemented. It does nothing to address a yawning shortfall of about $800 million in the pension plan for the state’s public schoolteachers, a growing debt the state will have to settle sooner or later.
It ignores even minimal tax reforms as well as expanded gambling in Kentucky, a source of more revenue.
And while the budget provides a modest increase for the state’s public schools, which had been falling further behind each year, it does so at the expense of more damaging cuts to public universities and community colleges (1.5 percent) and many state agencies that will see a 5 percent cut in funds.
These cuts of course come on top of $1.6 billion in cuts to most agencies over the last six years.
And Kentucky’s mine safety agency took a cut of 30 percent for no clear reason other than the apparent desire of some legislators to get the government off the backs of coal operators.
The budget cuts nearly $5 million from the Office of Mine Safety and Licensing and cuts the required number of annual state inspections of underground mines from six to four.
And what was the response of legislative leaders to this budget?
House and Senate leaders lavished praise on each other for working together to agree on a budget before they ran out of time, which actually is their job.
The budget and revenue measures are now before the governor for his review and signature.
While he can’t add any more revenue, he could veto some items.
We suggest he start with cuts to mine safety and tax breaks for business.
— The Courier-Journal, Louisville