Stop stalling on tax overhaul

It's essential for state's prosperity

Gov. Steve Beshear should apply the same logic to tax reform as he's applying to education.

Even though this recession has the state struggling just to maintain what we have, Beshear has commissioned an education task force to put together a coordinated plan for the next stage of reform. That way, Beshear says, when the economy turns around and there's money to improve education, Kentucky won't waste time figuring out the smartest ways to do it.

Makes sense.

Likewise, it seems to us, with tax reform. If lawmakers created a more sustainable tax base now, by raising some taxes and lowering others, when the economy turns around Kentucky would receive maximum benefit from the upturn.

And yet, even though the weaknesses in Kentucky's tax structure have been widely recognized for 15 years, Beshear says this is the wrong time for reform.

In a statement to reporter Linda Blackford, the governor said: "As Kentucky grapples with the challenges of a global recession, raising broad-based taxes is not in the best interests of working Kentuckians and families."

More like it's not in the best interests of a governor running for re-election in two years, especially since changes in the tax code would generate criticism but little if any new revenue in time for the campaign.

Beshear also wants to keep the legislature focused on his plan for slot machines at race tracks, which is touted as a way to keep Kentucky racing competitive and pump some badly needed cash into the state budget.

We understand Beshear's calculus. No one seems to notice when some taxes go down, although political rivals will remind voters when other taxes go up. Kentucky politicians of both parties have always run on no-tax promises.

But they're not leveling with voters. The worsening structural imbalances in Kentucky's budget and the economic shift from an economy based on manufacturing to one based on services make tax reform unavoidable.

It's a question of when, not if — unless we're willing to see a continued erosion in state services, fewer social workers working under ever more dangerous conditions, hollow environmental enforcement, the nation's longest waiting list of HIV patients needing drugs.

Slots could provide some welcome relief, especially as the federal stimulus money that's balancing the budget runs out. But slots will not be enough to put the state budget on solid footing for the future.

We're seeing how economically sensitive gambling revenue is as casino companies, and the governments that depend on them, have watched their fortunes plummet in this recession.

It will always be easier to put off tax reform until a second term or leave it for the next governor. But the longer we wait, the further behind Kentucky falls.