Changing the dialogue in Frankfort is a challenge. But it’s possible when a compelling argument is based on well-researched facts and figures reinforced with recommendations for practical solutions.
That, in brief, is the story of the Leaky Bucket, the Kentucky Chamber’s groundbreaking 2009 study that found spending in corrections, Medicaid and public employee health insurance to be growing at a faster rate than the overall state budget and Kentucky’s economy. The alarming trend had a particularly disturbing bottom line: more money for the unsustainable leaks in the state revenue bucket meant a diminishing commitment to education – the key investment the state can make in its future.
Since the report’s release, Kentucky’s elected leaders and policymakers have made important progress in addressing the areas of unsustainable spending. Of perhaps equal significance is the fact that smarter spending has become a bigger part of the conversation about Kentucky’s revenue needs. The Chamber believes this is in recognition of the fundamental reality that, no matter how much revenue the state collects, the bucket will continue to leak until the areas of unsustainable spending are addressed.
The need to address spending remains critical, and a compelling case was made in March when Moody’s Investors Service downgraded its ratings on Kentucky bonds to AA2 and maintained a negative outlook for the state. Moody’s action followed that of Fitch Ratings, which downgraded Kentucky from stable to negative, indicating concerns about the state’s financial direction.