Kentucky’s pension problem is largely a problem created by the state, not local governments and school districts. Yet instead of shouldering the responsibility for the extra money needed itself, the state is shoving that responsibility off onto local agencies.
The results? More painful cuts to local services, and probable tax increases from local governments, which have fewer options and less strategic means for implementing them.
As Kentuckians, we are going to pay for our pension problems one way or another. We can pay for it at the state level, with taxes that can be spread across larger numbers of people and the option of progressive increases — wealthier residents shoulder a bigger percentage of the cost. Or we can pay for it at the local level, with cuts to services and/ or tax increases that cannot be tailored to avoid hurting those already living on thin margins.
If it were local governments’ fault that Kentucky’s pensions were in such bad shape, we wouldn’t have much sympathy. But it’s not their fault; they have paid what they were supposed to pay every year. The state government is where the problem originated, and it’s where the least painful options for a remedy exist.
But our current leaders seem locked into their current objective of making the little guys pay for Goliath’s missteps. They would rather cause Kentuckians more pain in the long run because it lets them shift the blame for the necessary tax revenues onto local governments. They can keep getting elected by not making the hard choices, even though their own constituents are worse off for it.
Pensions aren’t the only place we see this dynamic playing out. The state has been shifting its jail costs to local municipalities for years, if not decades, by forcing local jails to house state prisoners but failing to pay them enough for that service. Our schools, too, are funded more than ever by local taxes, thanks to state education funding trending the wrong way. Counties have a harder time every year keeping their roads paved thanks in part to Frankfort’s lack of effort on maintaining strong infrastructure funding.
You could argue that it doesn’t matter whether the taxes are paid at the state or local level, as long as they’re going to fund the same things. But that ignores the large discrepancy in financial wellbeing across Kentucky’s many different counties. In rural, often poorer counties, benefits that used to be the state’s responsibility are more likely to disappear, because residents don’t have deep pockets like their fellow taxpayers in urban and wealthier counties.
If they don’t change their course, state lawmakers’ sin of shirking their duty will ultimately lead to two Kentuckys — one along the interstates and in the cities, where bigger incomes allow residents to pay for good schools, roads, jails and retirements; and another along the country backroads, where those luxuries can no longer be afforded.
— The Advocate-Messenger