Saturday, March 13, 2010

Jessica Hays: House Budget plays with Kentucky's future

House Budget plays with Kentucky's future
by Jessica Hays
Kentuckians for the Commonwealth (KFTC)

Now that the House budget proposal has been out for a few days, we’re starting to see the extent to which the House contorted numbers and ideas to avoid having to support real reforms.

The budget does a couple of things that are not bad. It puts some much needed money into community health centers and services like Meals on Wheels, and starts to fund the Boni Bill, a bill that passed in 2007 to increase the protections of social service workers. This funding is good and necessary. But in addition to the cuts to higher ed, adult education, the school year and teacher pay, and services that we need, the budget does many things that show a lack of leadership by playing with our future instead of solving our problems of today.

The budget includes $74 million dollars that is the result of moving the one paycheck for state workers back one day, from June 30, 2012 to July 1, 2012. This way, the $74 million dollars is technically part of the 2012-2014 budget cycle. This little nugget was slipped in to the 238th page of the House budget proposal. It didn’t make any headlines, but was embedded in a Herald-Leader article about the House’s proposal to halve the salary of Economic Development Secretary Larry Hayes.

It’s an important little nugget, though, because it shows the acrobatics that legislators were willing to perform to avoid taking up real solutions. A budget that’s “balanced” because it pays state workers the day after the budget cycle? It doesn’t inspire confidence, does it?

This shell game is also exactly the kind of game that jeopardizes Kentucky’s credit rating. Kentucky is already on the watch list of some of these credit rating agencies, both because of our policy makers’ failure to pass sustainable revenue reforms, and because of our dependence on a manufacturing economy. Moody’s is one such agency. When their analysts look at Kentucky, they don’t see a credible borrower. According to a memo from the Legislative Research Commission in September of 2009, Kentucky's leadership should be very concerned about what credit ranking agencies are seeing when they look at Kentucky. Here are the pieces of evidence they see:

Our lack of leadership predates the recession. The LRC echoes credit agencies' concern that Kentucky depends on one-shot, nonrecurring revenue sources to fund services and programs that we rely on every year. Eventually, the smoke and mirrors aren’t going to be able to hide the ever-worsening real-world gap between the revenue the state brings in and the cost of the services that we need.

To Read the Rest of the Report

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