My philosophy is: You do not tax the citizenry when the economy is in a downturn. You do not take more dollars out of an economy that is already shrinking. Presidents Kennedy and Reagan realized that tax cuts are what stimulate the economy and they both reduced taxes.
I believe there are other areas where the state has not reduced enough and made good faith efforts to collect the taxes that are due. I personally can identify more than $350 million in such taxes. The budget proposal the Senate also passed does trim government's costs by more than what the General Assembly raised in new revenue, but our work must still continue.
We must now prepare ourselves for more of the same next year. On the Senate floor, I called it Groundhog Day economics, because the revenue package will not meet our current needs and certainly not the next one either.
We could be more than $550 million behind by July 2010 even with this current tax increase. Economists warn that the next year will be worse. We all agree that we must reduce the base, but how to do it is not yet agreed. We must prepare state government, as so many families are, for declining revenues. That is why the General Assembly is insisting that any federal stimulus dollars Kentucky may receive must be treated as one-time funds and not add to our spending requirements. I agreed with this bill. This bill does not guarantee that there will not be more cuts next year.
I expect the Governor may not be able to hold education harmless with this legislation but I pray that he will. The fact that many in Frankfort do not want to admit is - Kentucky has a $600 million shortfall and not a $456 million one. Until we address the problem, there can be no solid solution. Kentucky, not any other state, will tax itself out of a recession. We need to fix this and stop asking for more tax at a time when no one can afford it.
While much trimming of costs was accomplished under the previous administration, our work still continues now. The budget proposal we also passed this week cuts state government by more than we proposed to raise in the tax plan.
We must prepare ourselves for next year, which economists warn will be worse than this year. Because of this, the budget proposal includes strict parameters on the governor's spending. We all agree that we must reduce our base where we can and hold the line everywhere else. We must prepare state government, as so many families are, for declining revenues.
This is why the General Assembly is insisting that any federal stimulus dollars Kentucky may receive must be treated as one-time funds and not add to our spending requirements. Any General Fund dollars replaced by stimulus dollars must go to our rainy day fund.
In this prudent and bipartisan manner, there won't be the kinds of cuts in Kentucky that there almost certainly will be in other states.
As we fiscally prepare Kentucky for the future, we must also prepare our children. The Senate passed two far-reaching education proposals this week.
Both Democrats and Republicans worked together to pass Senate Bill 1, the Senate's signature bill. This legislation will replace CATS with a nationally norm-referenced test, supplemented by additional multiple-choice questions to ensure full coverage of Kentucky's core content at grades three to eight, and the EPAS system (EXPLORE, PLAN, and the ACT) at the high school.
We have heard from so many parents and teachers that the current assessment program does not provide valid information on how well their children are doing in comparison with their classmates, students in Kentucky, and students nationally.
Many teachers also feel that they must "teach to the test." The legislation will help parents and teachers track how their students are doing year-to-year and provide comparisons with national norms and with other states so that we have an accurate measurement of how our educational system is progressing.
Senate Bill 3, also passed in a bipartisan vote, provides an early graduation option to high school students who meet course requirements, grade point average, and college readiness standards.
A student who completes an early graduation program will receive an "Early Graduation Scholarship Certificate" to help defray the cost of the first year's tuition of a post-secondary institution. Legislation like the above will help focus our students on the higher challenges required of them.
We still have more than a month of the 2009 Session remaining, please call me if you have any questions or concerns about upcoming legislation or would like to voice your opinion, toll-free at 1-800-372-7181.