Lawmakers should tackle taxes, pensions in same session

Published 11:39 am Friday, September 15, 2017

THE STATE JOURNAL

Simultaneously addressing our woefully funded pensions and taxes is a long expressed desire of Gov. Matt Bevin that appears to have either died on the vine or been discarded before ripening by House and Senate leadership.

Approaching pensions any other way would be a mistake of the highest order.

Pension reform and tax reform must be considered together. To separate them ignores the reality that revenue must be part of the fix and is tantamount to addressing one of the largest problems the state has ever faced with one arm tied behind our collective back — and having the other hand in our collective pocket.

The consultants’ recommendations last week were indicative of the draconian measures that would be required if pension reform was handled alone. In the consultants’ defense amid the criticism, their marching orders were to examine only pension reform. They did what they were paid to do.

However, their recommendations are a stark reminder of the need for new revenue.

Taxing our way out of the problem won’t work. No solution exists that’s painless for current state workers and certainly not for future state workers. Anyone who advocates letting this train continue to run off the tracks is not serious about ensuring the solvency of the pension systems and state government.

The governor is being realistic and showing leadership in acknowledging that revenue (see taxes) must be a part of any solution .

We want to see some updates to the tax code that likely won’t be touched with a 10-foot poll regardless of whether the revenue is addressed alongside pension reform. That includes local-option sales taxes and reforms to the allowances for cities the size of Frankfort to charge restaurant taxes.

We got another reminder Friday about why allowing localities to raise revenue for specific needs is needed.

While we were waiting for more information on the retirement system and word about the impending special session, we were hit with a massive number: Bevin announced more plans to slash state spending by 17 percent.

We will argue about the size of the cuts and from where they come, but it is the most stark reminder in a long time that the state is cash-strapped. Taxes aren’t the only means of addressing that, but to take them off the table entirely is unwise.