Kentucky's budget problems could be related to greater economy
A study of Kentuckyâ€™s tax system concludes that the stateâ€™s recurring budgetary problems are due, in part, to the long-term decline in general fund revenue buoyancy â€” a measure of whether revenue is keeping pace with the economy.
The study was a joint effort between the Martin School of Public Policy and Administration and the Center for Business and Economic Research (CBER), which is located in the Gatton College of Business and Economics at the University of Kentucky. Citing the need to raise more revenue, Gov. Steve Beshear announced in early January the creation of a Blue Ribbon Commission on Tax Reform. One of the goals of the commissionâ€™s work is to help create a tax system that is "elastic." According to the governorâ€™s office, an elastic tax code "should allow state revenue performance to mirror economic performance."