Kentucky gives away millions of dollars in corporate subsidies and tax loopholes, an amount that far exceeds the annual cost of funding public pensions. That is the conclusion of a new report released yesterday by Good Jobs First, a national nonpartisan organization that tracks economic development programs.
Earlier this year, when Gov. Matt Bevin began calling for a special legislative session, he said the session would address both public pensions and tax reform. It seemed that he recognized the need for Kentucky to find new sources of revenue to shore up their woefully underfunded public pension systems. According to a report from the Office of the State Budget Director, the state gives away more each year through tax expenditures than it collects in tax revenue.
Unfortunately, Bevin has recently dropped tax reform from the issues he hopes the legislature will address during the expected special session. Now he is calling for a special session exclusively focused on public pensions. It appears that rather than correcting years of neglect by the state government and finding new revenue to improve the funding of the public pension systems, Bevin is intent on gutting public pensions and weakening retirement security for Kentucky’s public employees.
It is timely then that Good Jobs First released this report that focuses on both tax giveaways and public pensions. According to the report, the annual cost of funding pensions in Kentucky represents only 69 percent of the annual cost of corporate subsidies and tax loopholes. Rather than pursuing harmful cuts to pensions for current and future public employees, Kentucky legislators must address the costs of these corporate subsidies and tax breaks.
Gov. Bevin has not yet called the special session, but is expected to do so. If the session only features attacks on public pensions, that will be a devastating blow to the retirement security of current and future public employees. As Good Jobs First has shown, corporate giveaways cost far more for the state each year than public pensions do. Kentucky legislators must address the lost revenue resulting from these subsidies and tax breaks and how that lost revenue contributes to the underfunded status of the state’s public pension systems.