Overhauling Kentucky’s tax code is key to our future
by Governor Ernie Fletcher
Editor’s note: this is the first of a monthly column by various authors on issues facing Kentucky
As a parent and grandparent, I want our Commonwealth to have a thriving economy, a strong education system, and provide good-paying jobs that keep our young people in Kentucky.
There is one public policy initiative Kentucky can enact to boost the economy, stimulate more investment, build and sustain better careers, and create more opportunities for job creation.
All this could be accomplished while, at the same time, reducing the tax burden for almost every working family.
That public policy initiative is tax modernization.
Our tax system doesn’t maximize investment in our economy. It doesn’t provide stable revenue to fund important programs such as education. And it doesn’t treat everyone fairly.
In the wake of a budget gap at the beginning of my administration, we relied on fiscal responsibility to resolve a $300 million budget shortfall and institute a $100 million budget stabilization plan. We will continue to be good stewards of the taxpayers’ money.
But the time has come to build a stable foundation for the budget. That foundation is a fair, modern tax system.
Ronald Reagan once said, “Government’s view of the economy could be summed up in a few short phrases: if it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
That old, misguided philosophy stifles economic prosperity in Kentucky, while other states have encouraged and achieved tremendous growth.
Thirty years ago, the economies of Kentucky and Tennessee were virtually identical. But from 1964 to 1999, Tennessee’s economy grew approximately 20 times faster than Kentucky’s.
The contrast is stark but simple: Tennessee maintained low taxes. In fact, it was one of nine states that had a falling tax burden. Kentucky’s families and employers, on the other hand, were saddled with even higher taxes.
Our tax code is riddled with antiquated, outdated, and sometimes unconstitutional provisions, causing Kentucky’s taxes to be unreliable and unfair. All of those problems lead to an unstable and unpredictable source of revenues, which makes it difficult to budget reliably for important programs.
Another problem is the tax burden on families. Under my proposal, almost every working Kentucky family will receive a tax cut.
We must encourage the unbridled spirit of entrepreneurship and job growth. We must address the needs of all Kentuckians and promote new opportunities for families.
For our children and for our communities, I hope that you will support this effort.
Martha Stevens from Hodgenville called to correct a part of the What’s Cooking? story on cookbook author Irene Hayes in the December issue. She says Dwight Eisenhower was served cheese pudding when he came to visit the Hodgenville women’s club, not Hodgenville Ham Pudding, as reported in What’s Cooking in Kentucky and repeated in Kentucky Living.
The CEO of the Kentucky League of Cities has written a personal and policy book calling on people to take meaningful actions to make their communities better. In 116 pages of New Cities in America— The Little Blue Book of Big Ideas, Sylvia Lovely, who is also president of the New Cities Foundation, urges people to become what she calls Community Patriots.
“Community Patriots are men and women willing to put others first—willing to step out of their comfort zones and take an active role in promoting, protecting, and providing for their communities,” she writes.
The book lists 12 principles Lovely says people need to know to improve their communities, principles such as encourage youth, diversity, and inclusiveness; remain true to the city’s uniqueness; and buy locally, sell globally. She elaborates on each principle with examples, from educational innovation in Cloverport and downtown renovation in Sandy Hook, to bicycle-friendly Odense, Denmark, and a comprehensive transportation plan in Liverpool, England.
In addition to these community success stories, Lovely illustrates her points with examples from her own family experiences. And in what seems a timely prescription after last fall’s contentious election campaigns, she writes in her last chapter, “We need to create a climate of healthy debate where opposing views are truly heard and compromise is encouraged.”
The $14.95 book is available through Butler Books, P.O. Box 7311, Louisville, KY 40207, (502) 897-9393, and at www.newcities.org.