Trio of Democratic lawmakers will appeal higher ed. decision; state should generate more revenue via tax reform, Rep. Wayne says

05/25/2016 12:23 PM

After a Franklin Circuit Judge ruled that first year Republican Gov. Matt Bevin followed the law in ordering 2 percent allotment reductions for state colleges and universities, a trio of Democratic lawmakers is appealing the ruling to the state Supreme Court.

Rep. Jim Wayne, D-Louisville, is among the three lawmakers who have joined party to the suit which was first filed by Attorney General Andy Beshear. Wayne said he personally feels “strongly” about their chance of winning the suit on appeal to the Supreme Court.

“It’s a question of separation of powers, and it’s not personally against the governor or what his intentions are — it’s to clarify in the law whether a governor, when the legislature is not in session and has not approved a change in the budget, whether a governor can change the budget,” Wayne said of the lawsuit.

As current fiscal year allotments look to be trimmed by Bevin, and the next biennium budget sets in place postsecondary education reductions of 4.5 percent over the next two fiscal years, Kentucky’s statewide rankings continue to fall.

The Commonwealth of Kentucky now ranks six spots from the bottom in per student funding since the 2008 depression.

From 2008 to 2016, Kentucky officials cut higher education funding 32 percent, according to a study by the Center on Budget and Policy Priorities.

Wayne says the cuts to higher education and rising tuition costs amount to a tax increase on students and parents.

“What we have to be aware is that when you don’t have enough revenue to cover certain things what happens is we masquerade tax increases and we don’t call them tax increase, but they really are,” Wayne said. “So, you really raise taxes on college kids and their families for this coming year and the next two years.”

With slim revenue generation in Kentucky, and plenty of pledged obligations including one of the nation’s worst-funded public retirement plans as the Kentucky Employees Retirement System, which covers most state workers, has less than 18 percent of the cash needed to cover its liabilities, Wayne said the state needs to generate more money.

One way to generate funds is to reform Kentucky’s tax code. The Louisville Democrat was one of the members to the 2012 Blue Ribbon Commission on Tax Reform lead by then Lt. Gov. Jerry Abramson. The report found the state could generate an additional $690 million dollars in revenue to the state.

In 2017, Wayne hopes the General Assembly will look back to the 2012 work group as a starting point to reform the tax code and add to the revenue base in a bipartisan fashion.

“Even the most conservative multi-millionaire on that commission came to realize, we don’t have enough money in the state budget,” Wayne said of the 2012 working group. “And the most conservative multi-millionaire right wing person on the commission said we need to increase taxes.”

As always, the devil is in the details. Wayne said there should be a mix of reforms that would include money set aside for tax expenditures to attract new businesses, but to also broaden the sales tax to primarily wealthy individuals.

Watch the full interview with Wayne in the video below.


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