Budget will hobble Kentucky

While we applaud Gov. Matt Bevin and lawmakers for tackling the crisis in public-pension funding, there’s little else to cheer in the budget that Bevin signed Wednesday.

More than anything, the two-year spending plan is a formula for stagnation and losing ground to other states.

When adjusted for inflation, Kentucky’s funding of higher education will have declined by almost one third since 2008, while the core funding formula for public schools will be 12 percent below its 2008 level, according to the Kentucky Center for Economic Policy.

Bevin can’t be blamed for his predecessors’ failures to reform Kentucky’s Swiss cheese of a tax code, which exempts more in taxes than it collects. But he won’t be able to accomplish much without bringing in more revenue.

Lawmakers can’t seem to break their habit of enacting a loophole here and a credit there, which is why Bevin’s earlier vetoes of several new tax breaks was so encouraging. The governor said such changes should be part of comprehensive tax reform, something Kentucky has long needed, as this budget painfully shows.

While the House was able to negotiate Bevin’s 9 percent cuts to higher education down to 4.5 percent and shield many public-school programs from cuts, most of state government will be subject to 9 percent funding cuts over the next two years — cuts that come on top of almost a decade of earlier cuts in everything from the arts to environmental enforcement and services for children and families. The overwhelming majority of state workers will get no raise.

Disappointingly, Bevin vetoed $40 million in need-based college financial aid for 22,000 low-income Kentuckians. Students had lobbied the governor and lawmakers to honor a requirement in state law that 55 percent of lottery proceeds go to two need-based financial aid programs. And it looked as if the students had succeeded until Bevin’s Wednesday vetoes, which an already adjourned legislature cannot override.

The governor shifted the money into a college dual-credit program for high school students that the Senate wanted and the House’s Work Ready program to support community-college students, which Bevin delayed by a year. The budget bill, however, does provide $15 million more for need-based aid over the next two years than was available in the current biennium.

Bevin also vetoed an expansion in pre-school eligibilty to children of families whose incomes equal up to 200 percent of the federal poverty level or $32,040 for a family of two, even though he did not reduce the $90 million for pre-school in the budget. “Mandated expansion of eligibility, however desirable, is not prudent in tight fiscal times,” said Bevin.

A state that thinks it cannot afford to educate its people — from pre-schoolers to graduate students — cannot expect to compete.

This story was originally published April 28, 2016 at 6:44 PM with the headline "Budget will hobble Kentucky."