|On 11:54, 17 January 2010|
Kentucky Pension ReformKentucky is facing a budget crisis and a pension plan crisis for Kentucky State workers. Much of the budget crisis has to do with welfare expansion and pork barrel spending and of course raising the pensions of state legislators. The executive and judicial branches in Kentucky have pensions and salaries that are burdening the Kentucky tax payer. Their pension plans and salaries are excessive. Kentucky is facing a $1 billion budget shortage, but legislator’s pensions will increase from $759, 158 to $4.28 million over the next two years. This is according to a report released by the Kentucky actuarial report on the Kentucky Legislators Retirement Plan. Half of the $4.28 million will be beneficial to 30 current and retired legislators (Steitzer, 2009). The Kentucky state General Assembly in 2005 changed state law to allow Ky state Congressman who accept jobs with the state to use their higher, non-legislative state salaries to decide their Congressional state pension. This is because state congresses jobs are part time, and this means low salaries in some cases not more than $20,000 a year. Salaries in the state Judicial and Executive branches go up to the six figure range. This is wrong on many levels. First it is morally wrong, it also is one of the major reasons we are bankrupt as a state (Steitzer, 2009). Giving out millions more in legislative pensions could be a bad choice politically since elections are coming up soon. This year lawmakers will be making a new two year budget, and they will have to take out hundreds of millions from an already slim state spending plan. But you can be sure they won’t cut it from the state legislators pension plan (Steitzer, 2009).
Reforms are needed to fix Kentucky’s public pension system. Sky rocketing retirement rates are severely hampering our budget. If we reform the Kentucky state pension system we will be curbing unsustainable pension costs. We need to reform the County Employee Retirement System specifically (Cities, 2009)
The two tax measures will be proposed in the interim joint Committee on appropriations and Revenue in June. HB 51 PHS is a bill that is backed by Representative Bill Farmer and it will wipe out the personal and corporate state income tax giving Kentuckians a sigh of relief. It will affect all Kentuckians, rich and poor positively. Consumer prices in Kentucky will go down since the Kentucky state corporate tax is being repealed. More Jobs will be created for Kentucky because of the elimination of Kentucky State’s corporate tax. Wealthier Individual will have more money to invest in Kentucky’s future. Representative Jim Wayne introduced HB 62, which would burden the middle and upper class, while extending welfare to the indigent. More jobs would be lost because the corporate state tax in Kentucky would be increased. Because of the pension and budget crisis Kentucky has to find a way to create more revenue and cut spending. They would like to do this without raising Kentucky taxes. We have a $996 million budget shortage for 2010, and this is according to the Commonwealth’s Consensus Forecasting Group. “HB 51 PHS, a bill backed by Representative Farmer repeal’s the Commonwealth’s personal and corporate income taxes as well as its limited liability entity (Policy, 2009). Data from Legislative Research Commission demonstrate that HB 51 PHS will generate; Additional revenue in fiscal year 2010. “HB 262 / HB 223, the bill sponsored by Representative Wayne would raise income tax rates for well-to-do Kentuckians; create a new income tax credit based on the Federal Earned Income Tax Credit (EITC); reinstate a version of Kentucky’s estate tax; and also subject a variety of services to the sales tax”. This would be disastrous to the Kentucky economy. The prescription for success in a recession is to lower property, estate taxes or get rid of corporate and personal income taxes and shrink the welfare budget. Spending more on welfare and raising personal and corporate taxes is a sure prescription for failure.
|Reply to Zimmerman|