Economy

Legislation to bar state General Fund debt from exceeding 6% has been approved by the full Senate. Republican Senator Joe Bowen of Owensboro has been pushing the measure since last year when a similar measure passed the Senate but died in the House.

Bowen said Kentucky now has $6.3 billion in debt and that, he says, translates to $14,589 in debt for every man, woman and child in Kentucky.

Bowen said lawmakers need to do the right thing by putting a limit on the legislature's credit card. The bill now goes to the House where it faces a shaky future.

Despite the end of the economic recession and a growth in state revenue, Kentucky’s budget will remain tight. Former Budget Director, now Cabinet Secretary Mary Lassiter will address a joint House and Senate budget committee Tuesday.

She is expected to say state programs and agencies should not expect cuts in recent years to be restored in the next State budget.  Lassiter tells the Courier-Journal, “There’s no money for anything.” 

Lassiter says any new revenue in the state budget passed in 2014 budget will be consumed by additional spending required for pensions, Medicaid, and replacing one-time funds being spent on recurring needs in the current budget.  She declined to say if the tight long-term revenue outlook will also be the theme of the State of the Commonwealth address Gov. Steve Beshear is to deliver Wednesday night.

A recently-released poll shows that a majority of Kentuckians support expanded gambling.

In the Courier-Journal Bluegrass Poll, 60 percent of those polled said they support expansion. For the first time, a majority Eastern Kentucky resident support gambling. 

The support is for a so-called clean gambling bill, which would not include any protections for horse racing tracks.

That's the approach Governor Steve Beshear is planning for his next gambling push. But opponents of gambling say any potential bill will fail because supporters can’t choose a single strategy. Also, only one track, Churchill Downs, has endorsed Beshear's plan.

A new report by the Institute on Taxation and Economic Policy shows a big gap between Kentucky’s income levels on who pays taxes.

The report says Kentucky’s top 1 percent income bracket pays roughly 5 percent of the state’s income, while the bottom 20 percent pays 9 percent.

Middle income levels are saddled with a higher percent, the report said.

Jason Bailey, director of the Kentucky Center for Economic Policy, says the numbers show tax reform needs to happen quickly in Kentucky to better balance the burdens.

“This is one of the big issues that tax reform needs to address, the issue of the fairness of the tax system and the fact that there is inequity in who pays,” he said.

Lawmakers are likely to put off taking up recommendations by the state’s latest tax reform commission until a special session later this year.