We all vote based on our unique perspectives and view the importance of certain issues through different lenses. Some vote strictly on key policy ramifications, social or fiscal philosophies, and some vote strictly along party lines. This isn’t to say that the motivations for casting a vote can’t be more nuanced, I’m sure most of them are. The votes I cast were certainly more complex than a particular stance on any one specific issue.
In a county that largely supported republican candidates in the state house of representatives, state senate, fiscal court, the sheriff’s office, and didn’t challenge the incumbent Judge Executive, I find some interesting intricacies and contradictions in the election results when I narrow my focus to the issue of fiscal responsibility and taxes. If you keep up with county and state taxes and spending then I’m probably not pointing out anything you haven’t already observed. If you’re one of the proud voters that helped keep Shelby County red however, I’ve got a few questions for you.
Tax increases for most residents, not cuts
Senator Hornback and Representative Rothenburger supported some interesting and contradictory things in the 2018 General Assembly. Many are familiar with the tax cuts that were included in HB 366 to spur business growth and clean up the tax code. They are both proud, I’m sure, to have their name attached to this bill especially since very few voters seem to mind the tax increases that were in the bill as well.
In cleaning up the tax code that bill cut the effective income tax rate in Kentucky of those in the 6% tax bracket to 5% and increased the effective income tax rate of those in the 4% tax bracket to 5%. Essentially, if you make less than $92,000 a year, you’ll see a tax increase. Additionally, there are new services and items that are subject to sales tax that weren’t previously. Maybe you noticed that the last time you had your car serviced. With the new “fairer” tax code, if you earn more than about $92,000 per year then you likely get a decent tax cut. Congratulations!
However, in a county where 52% of student households qualify for free and reduced lunch, there is a significant section of the population that will see a tax increase. An example of a household that qualifies for free or reduced lunch would be a household of 4 earning about $46,000 or less annually. According to current data from the Census Bureau, as many as 90% of employed Shelby County residents earn less than $90,000 annually and the median income for Shelby County residents is only about $61,000 per year. What’s interesting is that in the race for State Representative, about 11,000 people voted for Rob Rothenburger and that number is a little over half of all the employed citizens in Shelby County. Even if the entire segment of those earning over $90,000 per year voted for Rothenburger that would mean that about 8-9000 of those voters supported increased income and sales tax rates for themselves. By the way, this tax increase in HB 366 will cost 90% of Shelby households more than the last tax increase passed by the school board.
If you were already in the 5% tax bracket you really only have to worry about the increase in sales tax and won’t see any benefit from the tax cuts. No big deal maybe. I guess the good news is that for anyone making an average of $200,000 a year or more in Shelby County (about 2% of residents) they will get the benefit of anywhere between $750 up to $6000 or so in tax breaks. Maybe those lucky few will buy some bourbon or go out to eat a little more often and pump a little of that new money into creating quality jobs in the service industry.
Looking at the data, you could say that roughly 90% of the voters who supported the winning candidates for KY Senate and House of Representatives in Shelby County sent a clear message that they are more than happy to pay more in taxes as long as top earners get a break.
Glad to know the little bit more you and I paying in taxes will go to pay for those tax breaks, especially since our coffers are swollen with cash.
Wait, don’t we have a funding crisis? Isn’t the Governor having a panic attack about the poor condition of Kentucky’s crumbling roads? Didn’t he announce less than 48 hours after the election that new revenue will have to be generated to solve the problem? See for yourself here, ‘More Money Must Be Generated For Road Funding, Bevin Says’.
This isn’t a new crisis by the way, in 2016 Bevin cut $112M in funding from the Transportation Cabinet. Maybe those cuts, followed by tax cuts in a state that is having trouble generating revenue wasn’t a hot idea. Is it short-sightedness? Is it disregard? Is it an excuse to cut services in the coming 2019 session like education?
Historic funding or just more cuts to education?
The governor proposed massive cuts to education in his State of the Commonwealth in 2017 which were toned down by the time HB200 reached his desk, but deep cuts to education were supported by Hornback and Rothenburger in the 2018 legislative session. Of course if you got a mailer from Paul Hornback you probably heard more about “Historic Education Funding” as a result of his vote on HB 200.
What was missing from these ads and his statements on looking out for education is that while HB 200 did fund the SEEK per Pupil formula at a record dollar amount, which amounted to $19 per Shelby County student, that same bill cut $38 from each student in Shelby County by eliminating funding for textbooks and resources as well as teacher professional development. (Law requires a set number of hours of teacher professional development by the way so the expense remains and has to come out of other resources once dedicated to students.) Both Hornback and Rothenburger supported this bill that had a net effect of deep cuts to students here, not “Historic Levels of Funding.”
The only thing historic about education funding in Kentucky is that it still lags the level of funding in 2008 by almost 16% when adjusted for inflation. In fact, even after the “Historic Funding” and cuts in HB 200, Kentucky ranked 3rd worst for cuts to education since 2008.
If your goal is to save some money wouldn’t you tout spending cuts instead of only telling a half-truth about funding increases? Could it be that they didn’t read or understand the whole bill? Was it hoped that we wouldn’t notice or care? Was it just that “Historic Education Funding” looked good on a flyer?
Maybe a better question is why would you continue to undercut the systems that are instrumental in workforce development that are so crucial to bringing jobs to Kentucky. I could go on, but I have other things to cover.
Revenue cuts as needs increase in Shelby County
All politics are local, and maybe what’s happening in Shelby County government is where your vote for fiscal responsibility really has an impact.
In the fall of 2017, Fiscal Court voted to lower their tax rate a little (for the second year in a row), see the Sentinel News August 26, 2017, while there was looming uncertainty over state employee pensions and county employee pension contribution increases. The Sentinel News reported that “The county’s finance committee had met to discuss the issue two weeks ago upon the recommendation by Shelby County Judge-Executive Dan Ison who said he would like to continue the trend of lower taxes for county residents. This year’s reduction is double what magistrates approved last August, when they approved the rate of 10.9, lowering it only from 11 percent.”
There was praise for the Judge Executive and Magistrates that got this lower rate pushed through. But riding high on tax cuts soon turned to panic when it was announced for certain that county agencies would soon have to come up with as much as 48% more to contribute to CERS a few months later.
Yet, the county’s low tax rate is still applauded while under staffing and space continues to be a problem at the jail, EMT’s and emergency responders are being lost to better paying counties, and both candidates for Sheriff ran partially on their stance that the department needs to double the number of deputies to cover the county effectively. I’ve spoken to both Gene Witt and Mark Moore during the campaign and both expressed the need for and the desire to add 4 to 6 deputies.
The need for this many deputies didn’t happen overnight, it didn’t happen in 2018. Was it fiscally responsible to lower revenues in a county with so many needs and now a large burden from CERS contributions?
Of the magistrates that were elected this month, there will be an easy majority for the republicans working with a Judge Executive that ran unopposed. Two years of cuts to revenue, substantial increase in expenses given the new CERS contribution rates that are still phasing in, and funding needs that were already going mostly ignored. Where will those badly needed additional sheriff’s deputies come from?
Little old me
At the bottom of the ballot this November was little old me. I’m not immune from scrutiny. In the fall of 2017 I voted for a tax increase that amounted to about $16 per year based on a property owner with a $100,000 home. I was joined by two others on the board in this vote and at the time we were aware of the possibility of the increase in CERS contributions, we knew that funding from the state for students had been in decline for the previous 5 years, local funding wasn’t keeping up, and we knew that we were losing good teachers and bus drivers to other districts who were paying more.
Obviously I’m not going to be returning to the board of education next year after losing my election and there are probably a myriad of reasons for why I lost that I’m sure include distaste over my vote on that tax increase.
Now, leading up to that vote I received a lot of phone calls and comments, a lot of which were some variation of “When things get tight in my house, we tighten our belt.” I’m sure any official in the county gets those calls when considering a tax vote. When things get tight in my house, I tighten up. Maybe I drop cable, stop eating out, turn down the thermostat, and tough it out for a month or two. Pretty soon though I start looking for a job that pays more if I’m not successful in asking my employer for a raise. If you would continue tightening the belt in this case without finding ways to increase you’re income then we’re probably not going to get on the same page here.
I could give you data showing that SCPS has one of the lowest admin cost per pupil in the 13 other school districts in OVEC or I could tell you about the salary spending that was eliminated from central office the last 18 months or how much going to consolidated bus stops saved the district and how those savings and the tax increase went into teacher and driver pay to try and help retain good talent and employees but most folks I talk to are focused on the tax part and not the savings or the need part. Of the three members that were up for reelection this year I was the only one who lost my race. Of the other two, one voted for the tax increase and was unopposed in the election and the one who voted against the tax increase won easily. It’s a non-partisan office and I’ve worked hard to keep my views focused on issues surrounding students and I won’t out anyone’s party affiliation here. I have a lot of respect for both of those members.
I’m sure there are other reasons I lost but the feedback I received on my tax vote and the relationships it cost me with people I’ve known since childhood along with the vitriol some expressed in their termination of those relationships really just add to the confusion over some of the election results. From what I can see, is Shelby County saying tax increases are just fine depending on the party affiliation of the candidate? Are underfunded needs and cuts ok until they affect you? Is what is happening on the national political stage painting our views when it comes to local matters with a large red or blue brush?
Why aren’t tax ‘cuts’ the dirty word?
If not everything can be funded through efficiency gains and state and local agencies are expressing dire need for things that they can’t fund, then why are taxes a bad word? Why aren’t tax cuts a dirty word?
Maybe, just maybe, when a state leaves more revenue on the table in tax breaks than it actually collects, tax cuts should be the dirty word. We could double the general fund of the state and take pressure off struggling counties and municipalities and school districts without a single new tax. We could simply roll back the tax breaks and business handouts and none of us would have to give up a single service or pay into a single new tax.
The 2019 General Assembly is less than 60 days away and our representatives in Frankfort will be making decisions that affect the responsibilities of the state and where your money goes. New officials will be sworn in in Shelby County and will go to work in January. As they go to work will you look at the policies and programs they fund or cut and their choices when it comes to generating revenue?
I don’t mind paying taxes, especially when I get what I’m paying for. When my representatives tell me we have a funding short-fall or unfunded needs while deciding to vote for tax cuts then I get a little chapped. It’s not necessarily the officials’ fault, it’s our fault for supporting that official. While the wealthiest in Shelby County get a tax break, the quality of my daughter’s education is put in jeopardy as funding was cut from schools and I see on every paycheck how much more, about $10, is being withheld for Kentucky taxes. I feel like on the whole, Shelby County remembered a few buzz words this November like ‘tax cuts’ but ignored things like the County’s actual needs and the tax increase that hit 90% of us to pay for those cuts.
Written by Will Barnett. Cross-posted with permission from his
web site, Where There’s a Will There’s a Way.