When our legislators meet in Frankfort this week, their job is to develop a decent budget, one that allows our communities to get important work done that we can’t accomplish as individuals. We created public school systems to provide opportunity, public health systems to keep ourselves well, and environmental and public safety systems to protect our air, water, and people. For these to function — and to support our quality of life and our economy — these systems need adequate, stable investments of our public dollars.
The Kentucky Forward Coalition — a coalition of education and health advocates and faith, labor, and community groups — is working for tax reforms that would generate the money for investments that reflect Kentucky’s values, improving our quality of life. Many of us see first-hand how the chronic underfunding of our schools and community health services is damaging our Commonwealth. We teach the students who slip behind because of cuts to after-school programs and swollen class sizes; we console the families of people on waiting lists for treatment for mental illness; we work to keep children safe while coping with a severe shortage of resources; and we are the people who wonder why Kentucky couldn’t be among the top in quality of life indicators, instead of always stuck at the bottom. Kentucky deserves better.
The legislators need to stop scrambling for quick fixes every year. Until we fix our broken tax structure, we’re going to continue to lag behind the rest of the nation. And to be effective, solutions must include significant steps toward making our tax structure more balanced.
Right now, well over half of Kentuckians - 60 percent - earn up to $47,000. Those of us in this pool pay on average about 11 percent of our income to state and local taxes. Meanwhile, the wealthiest 1 percent contributes only about 6 percent. We need revenue solutions that bring balance, as well as needed funds.
Kentuckians should also beware of so-called solutions that, if adopted, could worsen the inequity in our current tax structure. Some in Kentucky have proposed raising Kentucky’s sales tax as a way to earn revenue. Our coalition believes that a sales tax rate increase isn’t a good option because it takes a much bigger bite out of the incomes of lower and middle income families. Data by the Institute of Taxation and Economic Policy shows the percentage of our incomes that Kentuckians currently pay in sales taxes. People who earn up to $47,000 pay between 4 and 5 percent of their income to sales taxes, while the wealthiest 1 percent pay less than 1 percent. It’s not a solution that is fair or sustainable.
Instead, we can pass fair revenue reforms that we can depend on year after year. One proposal that meets these criteria calls for comprehensive tax reform that would tax luxury services, income above $75,000, and non-farm estates. This proposal would also direct $100 million in tax reductions to more than 300,000 Kentucky families with incomes less than $42,000. All together, this plan would generate about $300 million in revenue a year — a significant step toward addressing our chronic budget gaps. This plan, sponsored by Rep. Wayne, sets the benchmark for needed reforms, and we’d gladly support other good ideas, as well.
Kentuckians have long understood that united, we stand. Now is the time to put aside ideologies that only tear down, and stand together for solutions that help us work together to make sure that Kentucky is a place where our kids can drink clean water and work in good jobs. It’s time to come together to move Kentucky forward.
Oxedine is president of the Kentucky Education Association. Owens is chairperson of Kentuckians For The Commonwealth.