The debt-ceiling, federal-budget debate may seem far away, but it's going to be up close and personal — sooner rather than later.
When federal spending is cut, Kentucky will bleed. The most recent calculations by the Tax Foundation, for 2005, show $1.51 in federal dollars flowing into the commonwealth for every $1 we send to Washington.
We are a poor and rural state. When economies tank, the poor get poorer and the rural poor especially suffer. The recession has hammered many Kentuckians and they'll take another blow when the federal budget shrinks.
With next year's race for governor heating up and legislative contests soon to get going, Kentuckians must demand that candidates explain the steps they will take to steer our own fate, rather than let markets and federal budget cuts determine our future.
Before the debate spins off into high-flying platitudes, let's get a few things straight
First, we've got to deal with our denial.
Kentuckians often believe we've practically cloned Daniel Boone, touting a self-image of rugged individualism and independence.
Individualistic, we'll grant; but independent, we're not. Certainly not when we depend on taxpayers from other states to subsidize us. We're plagued by other, often related, dependencies including to drugs and alcohol and a laissez-faire approach to honesty in government that squanders resources and tolerates corruption.
Second, we must give up our fatalistic assumption that things can never change.
The Tax Foundation ranks states by federal government spending versus federal taxes paid. In 2005 Kentucky ranked 9th but it hasn't always been that way. Throughout most of the 1980s, Kentucky was in the 20s, hitting a high of 24th ($1.14 received for every dollar paid) in 1987.
There's not a quick or easy path out of this mess, but there are some excellent guidelines already at hand.
In this year's "Building a Stronger Bucket," and "Leaky Bucket," an analysis of Kentucky's budget problems in 2009 (www.kychamber.com), the Kentucky Chamber of Commerce offered careful analysis and practical solutions.
The Legislative Research Commission's Poverty Task Force report from late 2009 (www.lrc.ky.gov/lrcpubs/rm504.pdf) relied on strong research to offer suggestions on combating persistent poverty.
Key recommendations from the reports:
■ Create a structurally balanced budget, which means committing to ongoing, long-term expenses only when there's revenue to pay for them. Signing up for costs that stretch out over years when there's only money to pay for them in the short term is like running up credit card debt to support a lifestyle you really can't afford.
■ Shift spending from locking people up to educating them. One increases poverty and the other decreases it. The General Assembly took a huge step forward with legislation this year to divert non-violent offenders from the corrections system. But there's more to do.
■ Invest in preschool and pre-kindergarten for disadvantaged children. The long-term payoffs have proven to be huge: higher employment and earnings, less crime.
■ Pass an Earned Income Tax Credit to assist and reward poor people who work.
■ Reduce spending on public employee health plans and commit to making their pension plans sustainable.
It's not that we don't know how to fight our dependency, it's that we lack the will and the leadership.
Kentucky voters can show their will by demanding a plan of action from those who want to lead us.