Kentucky' s political body responsible only for making a KY budget wants to continue 19 year old budget in 2014-2016 biennium budget; i.e., state expenses consistently absorbs current tax resources.
19 YEARS KY HOUSE BUDGET LEADERS ADVOCATES CONTINUING DEVASTATION TO UNBORN KY CHILDREN!
From 1975 through Governor Beshear's 2nd term all House & Senate budget chairs as well as Governor's administrations have yielded non-governance simply because they chose to continue to use their offices to run for re-election. Kentuckians now are suffering. What's worse, those Kentucky children unborn will have a tax burden placed upon them when they "draw their first breath"! You, me and them are responsible for such a travesty. 2014-2016 budget is the line where we say "STOP!"
An example is FY2009-2010 Tax Receipts and FY2010-2011 Tax Expenditures.
State Corporations have their way with state's budget. In 2013, they receive an estimated $400 million of corporate tax shelters.
TAX: INDIVIDUAL SALES CORPORATION PROPERTY LIMITED OTHER
INCOME & USE TAX LIABILITY TAX
FY2009
TAX RECEIPTS 0.42 0.37 0.05 0.06 0.03 0.11
FY2010 0.42 0.37 0.05 0.11 0.03 0.02
TAX EXPENDITURE
NOTICE: 2009 TAX RECEIPTS WERE ABSORBED BY 2010 TAX EXPENDITURES; I.E.,
TAX EXEMPTIONS, DEFERMENTS, EXCLUSIONS, CREDITS, DEDUCTIONS & PREFERENTIAL TAX RATES;
In other words, 2009 tax receipts, after covering 2010 tax receipts, did not have anything left to fund state services and benefits or pay on bonded indebtedness, which in 2013 is $8.2 billion dollars. This situation alone is enough to argue against Senate and House budget and House Leader's position taken that 2014-2016 biennium budget will not contain tax reform!
In January 2014 House officials say 2014-2016 House budget will continue to spend more tax dollars than Ky collects---budget tax dollars going to satisfy obsolete exemptions, deferments, credits, exclusions, deductions and preferential tax rates rather than modernizing Ky's obsolete tax base and cutting $1 billion dollars of unneeded expenses.
As a direct result of Ky lawmakers going on a spending spree (1994-2013) included Ky lawmakers transferring Ky Road Fund dollars to cover General Fund deficits---Governor Jones administration had record $150 million dollar transfer. This irresponsible behavior lasted from 1994 through Governor Patton's first term.
Responsible lawmakers feel 2014-2016 biennium House budget gate that lawmakers have two choices: (1) continue spending more than state collects, or (2) responsible lawmakers stand up and take action to shut down House budget unless it contains $1 billion dollars of appropriation cuts along with enhancement of state tax resources!
Currently,Ky house leaders, Stumbo and Rand and Senate budget leader (Bob Leeper) strongly indicate no tax reform or $1 billion dollars of appropriations cuts will be included in House 2014-2016 biennium budget nor the SENATE BUDGET! If this scenario continues elected state leaders who acquiescence in this irresponsible ploy will be placing unsustainable debt loads on unborn Kentucky children!
Kentucky needs a Legislature who has a vision on how to successfully deal with the budget crisis at hand and can translate this vision into reality, then communicate the information to everyone, i.e., general public, law and policy makers, state and local administrators, thus making them part of the future success.
It must be a plan incorporating “all for one…one for all! It should take shape in Kentucky as it has in the past. For example, Most all of Kentuckians benefited economically from coal severance tax revenues. Today, it has been the Kentucky farmers' who've been recipients of $3.45 BILLION Master Settlement Agreement Tobacco Plan whereby their net incomes have been guaranteed from 1978 through 2023!
To be competitive in the 21st Century Kentucky lawmakers must join together in a bi-partisan manner uniting Kentucky and communicating the severity of the budget crisis faced by Kentucky and, secondly, identifying and implementing solutions to solve Kentucky's current budget problems. This can be done with $1 billion dollar of appropriaton cuts simultaneously followed by modernizing Ky's current tax base & enhancing Kentucky's tax resources and strict compliance with "no new tax exemptions, deductions, exclusions, credits, deferments or preferential tax rates for next two bienniums!
The legislative body should have already developed “an intensive strategic planning effort" by having a soul searching examination of state government expenses that totally absorbs current tax resources. However, they have not even thought about it! They have waster valuable time debating frivalous meanderings---something on the order of "Deputy Barney Fife"!
Kentucky cannot compete effectively in the global economy unless Kentucky's legacy of poverty is broken. Kentuckians continue to live in poverty, stagnated personal income and inadequate opportunities. Today, Eastern Kentucky has a bleak economic future with coal mine closing loosing hundreds of jobs. However, there seems to be about 25% still uncommitted or earmarked, and if this is the case Kentuckians could, through their lawmakers, call for earmarking 25% of $3.45 billion fund to be deposited in the Coal Severance tax account to be used to fund Eastern Kentuckisn injured economically by coal industry's economically depressed state. This money could go for helping fund net net income of economically injured coal industy workers whose employers have now become dinasours of the past, if they don't clean up their product for world consumption.
The poverty rate in Kentucky fell during the 1990s, from 16.9% in 1988-89 to 14.7% in 1997-98. However, the poverty rate in Kentucky in the late 1990s was higher than the national rate (13.0% in 1997-98).
The common perception is that poverty is an Eastern Kentucky problem because some Eastern Kentucky counties have poverty rates among the highest in the nation. However, in terms of numbers, poverty in Kentucky is both a rural and urban phenomenon.
One-third of the 234,000 poor children in Kentucky (families of four with incomes under $12,675 in 1989) lived in Lexington, Louisville or Northern Kentucky. The 14 block groups (census designations of about 1,000 people) with the highest levels of poverty (over 80%) are all in Louisville. Of the state's 3,507 block groups, only 64 had no residents living in poverty.
For example, Owsley County has the highest poverty rate in the state (52.1%), but ranks 85th out of 120 counties in the number of poor people (2,570). Jefferson County, meanwhile ranks 109th in poverty rate (13.7%, five points below the state average, but is first in the number of poor (33,147).
“The single greatest difference between adults living with children who are in poverty and (those) who are not in poverty is the work behavior of the adults,” concluded the analyst.
One adult working was working full time through out the year in 62% of the non-poor families.
Nearly 31% of the children living in poor families had no one working during the previous year while only 1% of non-poor children lived in families where no one worked.
Education predicts income.
The largest single group of adults living with children is white, rural, married men with less than a high school education. Many of Kentucky's families live in abject poverty, and many more teeter on the edge of poverty.
In 2013 federal government continuing deficit mode as it struggles to right itself from World record recesson---that still exists in creation of job. During that world recession America's HOUSING & STOCK MARKETS lost $12 TRILLION dollars of wealth in 13 months; Global STOCK MARKETS lost $30 TRILLION DOLLARS OF WEALTH! These economic trends bred more families teetering on edge of poverty. (Global Money Trends, Gary Dorsch, 12/3/2008)
To be able to win over poverty, Kentucky's 2014-2016 biennium budget must think outside the box, so to speak. That means establishing a time frame to address tax reform (which House Speaker & House Budget Chair have no intentions of doing as well as Senate budget chair) while significantly reducing state government expenditures (which they have no inclination to do).
Governor Jones 1995 task force Commission On Quality & Efficiency recommended cutting appropriations $1 billion dollars; Governor Jones task force Commison On Tax Policy recommended reforming state taxes under a revenue neutral tax policy. "As is" Ky lawmaker protocol continues to drive Kentucky's future unborn children deeper into debt.
2014 RECOMMENDATIONS FROM RESPONSIBLE KENTUCKY TAXPAYERS
Suggest cutting state expenditures by $350 million:
Suggest cutting corporate tax shelters $400 million;
Suggest reviewing & eliminating $200 million of non-merit (political appointees) jobs;
Suggest eliminating $41 million of property tax & educational personnel administrative expenses as follows:
reduce Legislative staffing by $1.4 million;
reduce AOC staffing by $60 million;
review & reduce executive branch non-merit employee payroll $100 million;
Review and change ways the highway paving contract are bid
Reduce personal service contracts saving estimated $23 million, annually;
AMEND KRS TO ESTABLISH 17 PVA REGIONS (eliminating 103 PVA positions) saving estimated $23 million, annually:
REDUCE from 120 to 17 number of PVAs; Saves $12 million annually;
REDUCE total deputy PVA pay $11 million;
Direct Revenue Cabinet to collaborate with State Police Division of Commercial Enforcement Officers to equalize tax assessments and collections among all Kentucky motor vehicle owners;
Eliminate $200 million non-merit Executive, Legislative, Judicial non-merit positions
a. review following executive branch positions
# employees Exe Branch Positions Salary Range
48 Medical Directors 21,877-222,718
Med Exam II 145,000
Med Exam 145,000
Med Director 154,000
Med Exam III 134,000
282 Court 140,508
3509 Judges & staff 140,508
Asst Aud PA 103,840
LRC Director 195,000
Dep Dir Budg Review 132,660
Council Ed Account 121,200
Comm Staff Adv 118,320
Deputy Dir Research 108,288
Revisor of Statutes 106,638
General Councel 101,940
9876 KCTCS 314,037
1 Undersecretary 121,000
6 Vice President 94,000-122,000
7 President 94,000-222,718
20 Chief 22,877-192,618
508 Executive to 136,128
88 Commissioners to 175,000
88 adm Asst to 175,000
786 Managers 26,776-100,000
2 Legislative 37,000-100,000
129 Legislative 31,000-131,000
93 Compliance 27,000-;81,000
1216 Program 21,000-108,000
546 Policy 30,000-110,000
2713 Administrative to 125,000
676 Staff Asst to 132,820
530 Attorney 39,000-123,000
344 Auditor 30,000-106,000
250 Prgm Coord 32,000-71,000
1541 supervisors 19,000-86,443
Public Acct Auditor 68,849
PAA Auditor VI 66,714
82 " >100,000
138 Geneeral Assembly 46,172
42,886 Executive Branch 360,000
607 " " >100,000
275 Ky Housing Auth 140,000
Establish partnerships between State Government and State Government & big business to create more jobs for Kentuckians
Establish a partnership between State Government and organizations like Project Parent Program to significantly reduce teenage pregnancy
Raise taxes on a pack of cigarettes from 3 cents to $2.00 to reduce high incidence of death and disease from smoking
“If you drew a circle around Eastern Kentucky, West Virginia and the western part of Virginia, you'd probably get a third of all cases [of pancreatitis gene mutation] in the United States” said Dr. Albert Lowenfel.
Develop in 109 Kentucky counties $10 billion dollar-25,000 jobs paying $1.25 million in 2014 wages Wood Industry
Address Kentucky"s obsolete tax base reform through use of a “revenue neutral” tax strategy
a. expand Kentucky sales tax base (as recommended by Wayner tax reform bill) by including Selected services to be taxed---this is only applying taxes to those taxpayers who have not paid,since those people ought to have been paying since 1960
1. http://www.utexas.edu/studentgov/files/?getfile=366
a. IN 1995 COMMISSION ON QUALITY AND EFFICIENCY RECOMMENDED INCLUDING IN KENTUCKY TAX CODE AND/OR TAX BASE A CLASS OF PROPERTY LEFT OUT OF 1960 SALES TAX LEGISLATION; I.E., "SERVICES". RECENTLY, DATA SUGGESTED ON 23 SERVICES WERE TAXED.
b. Table 17. Total for EXCLUDED SERVICES:
2004 --- $ 971.4 million
2005 --- $ 1,032.1 million
2006 --- $ 1,096.3 million
Exclusion of Services
(Tax Expenditure Analysis-6.30.10, p.11)
Kentucky Revised Statute 139.100 and 139.160, effective 1960 services are excluded from the sales and use tax by the definition of retail sale” or “sale at retail” as a sale of tangible personal property.
AFTER combining Motor Fuels & Weight-distance tax revenues with state truck registration fee revenue eliminate truck weight-distance tax;
WHY? Motivate high paying trucking industry jobs to move to Kentucky while reducing from 3 to 2 amount of Kentucky truck taxes;
Collect from online consumer sales
Kentucky's current reliance on Sales, Income, Corporate and Property taxes,are based on wages, salaries and consumption and have become partially obosolete economic and demographic changes. Evidence is increasing number of business transactions crossing state lines via computers, mail order companies, national conglomerates, national franchises replacing mom-and-pop operations.
Trend of producing and consuming more services and manufacturing less goods
Every one familiar with economics has known for some time economic activity in the United States is steadily shifting away from the production of tangible goods to services.
2014-2016 Kentucky biennium budget continues to be based on obsolete economic trends
2014-2016 biennium budget should address state tax expenses absorbing current tax resources; i.e., such as: tax exemptions, credits, exclusions, deductions, deferments and Prefrential tax rates estimated total is estimated @$1 billion dollars; Action recommended:
reduced by $350 million in 2014-2016 biennium budget
eliminate $400 million corporate tax shelters eliminate $200 million of executive, legislative and judicial branch administrative costs
eliminate $700 million unemployment & Medicare deficits;
2014-2016 biennium budget must address other liabilities:
@4% for 30 years annual costs=$491,555,000
8.2 billion bonded indebtedness deficit
@4% for 60 years annual costs=$839,838,000
$19 billion state retiree underfunding deficit
@4% for 30 years annual costs=$40,480,000
$700 million unemploy & medicare deficit
Unemployment/Medicare
$350 million dollars of cuts from $1 billion of State tax expenditures
$400 billion of Corporate tax shelters
$200 million of Non-Merit (political appointees) pay of $100,000 or more;
Recommend enhancement of state tax resource:
Pass Wayne's Tax Reform bill
Add "selected services" to current obsolete tax base;
Collect estimated $300 million of motor vehicle tax evasion;
Eliminate truck weight-distance tax using "revenue neutral"strategy;
Pass "local tax option" for local governments;
1. 37% of 2004 local tax rates barely covered expenses;
2. 55% of 2004 local tax rates placed jurisdicitons in bankruptcy status;
3. Merge together into one KERS, CERS, SPRS, TRS to reduce administrative costs;
4. Reduce # of holidays and tighten supervision on comp, vacation, sick day use
5. Amend H.B. 44 to make permanent 15.5 cents per hurndred rate
6. replace H.B. 44 "HEX EXEMPTION" with "PROPERTY TAX CIRCUIT BREAKER"
1. eliminate automatic 2 years inflation adjustment Ky can't afford
2. apply "property tax circuit breaker” to all Ky taxpayers;
Pass 2006 H.B. 698 public & law enforcement to assist in locating, identifying, billing and collecting tax evading Ky motor vehicle owners
Best Regards,
Bill Huff
113 N. East St
Harrodsburg, Ky. 40330-1244
859.734.2228
huff9983@roadrunner.com
