LEXINGTON, Ky. (Nov. 7, 2012) – Possible changes to Kentucky’s tax system and the impact of state spending cuts on education provided the focus of the recent fall meeting of the Prichard Committee for Academic Excellence.
The committee, which met Oct. 30 at the Hilary J. Boone Center at the University of Kentucky, also received a detailed briefing on the impact of quality early experiences on children’s brain development.
Dr. William Hoyt, a University of Kentucky economics professor, outlined the work he and other consultants have done for the Governor’s Blue Ribbon Commission Tax Reform. The commission has been reviewing the state’s tax system and is expected to issue a report by the end of the year.
The consultants’ evaluation looked at Kentucky’s current tax system with respect to adequacy and elasticity, fairness, simplicity and competitiveness.
Among the findings:
– Tax revenue from 2000 to 2011 did not keep pace with the economy, declining more than the economy in eight years and exceeding economic growth in three years. This reflects a relative lack of elasticity – a tax system’s ability to change with the economy.
– Kentucky’s state and local spending in the broad category of public welfare is above average compared to competitor states (surrounding states and those with similar demographic and economic circumstances).
– State and local expenditures for elementary and secondary education are below average in Kentucky compared to competitor states.
– Kentucky ranks fourth among competitor states in state and local funding for higher education.
– Kentucky ranked third highest among competitor states in business taxes as a percentage of private sector gross state product in 2011. Studies suggest that Kentucky’s taxation of investment compares favorably to most of its competitors.
Lt. Gov. Jerry Abramson, the commission chair, told the committee that commission members are now reviewing nearly 100 suggested changes in the state’s tax system. The goal is to produce a report that provides options for the governor and legislative leaders to consider in changing the system, he said.
Because the upcoming regular legislative session is in an odd-numbered year, approval of a tax measure would require a supermajority vote (three-fifths) instead of a simple majority. As a result, Abramson said it was unlikely that a tax proposal would be made during the 2013 session and that a special legislative session is possible.
Although state budget cuts of the past few years have technically protected the basic funding source (the SEEK formula), school and district SEEK funds have fallen behind with growing costs and they have experienced substantial spending reductions in other areas. A panel moderated by Prichard Committee Executive Director Stu Silberman shared observations on the local impact of the cuts. Panel participants included:
– Fayette County Superintendent Tom Shelton
– Principal David Gilliam of Madison Southern High School in Madison County
– Special Education Teacher Merry Berry of Carter Elementary School in Carter County
– Danville High School Senior Alex Burnside
– John Hayek, senior vice president of budget, planning and policy of the Kentucky Council on Postsecondary Education.
The effect of education budget cuts, according to the panel members, has included:
– Larger class sizes and fewer teachers’ aides in elementary school.
– Reduced services provided by family resource and youth services centers.
– No new textbooks for several years and limited numbers of texts – to the point where students must share them and cannot take them home at night.
– Higher local taxes as the state has passed school funding responsibility to the community level.
– A lack of quality professional development, especially as new academic standards are being put in place.
– Higher student tuition for postsecondary schools.
– Postsecondary financial aid that falls short of serving all who qualify.
The panelists agreed that students – not just teachers and administrators – are being directly hurt by the lack of funding.
“This has gone way beyond hurting us. It’s hurting the kids,” Berry said.
Dr. Ruth Ann Shepherd, director of the Division for Maternal and Child Health in the Kentucky Department of Health, briefed the committee on issues related to early childhood – ranging from the impact of positive experiences on brain development to the state’s successful home visiting program, known as HANDS, for new families.
Research on early childhood development has shown, among other things, that experiences before the age of 3 have a decisive impact on adult capabilities and a toddler’s brain is twice as active as an adult’s brain, she noted.
The Health Access Nurturing Development Services, or HANDS, program is a voluntary, intensive weekly home visitation program for first-time parents that is designed to improve both health and social outcomes for a child and its family.
HANDS has more than 500 staff statewide who work through local health departments and serve all 120 counties, providing more than 14,000 home visitation services a month. The program is financed by the master tobacco settlement funds, which have been diminishing as smoking has declined.
Outside evaluators have documented the results of the HANDS program:
– 31 percent fewer premature births
– 33 percent fewer low birth-weight babies
– 70 percent reduction in infant mortality
– fewer developmental delays
– 50 percent less use of emergency rooms
– 29 to 40 percent fewer reports of child abuse and neglect
– 26 percent improvement in the parents’ education.