If Kentucky is to keep its financial house in order, it must establish a set of disciplined guidelines on spending tax dollars. We encourage Kentucky’s lawmakers, if at all possible, to adopt the following guidelines for state spending:
- Limit spending to 6% of the state economy.
- Limit borrowing costs to 6% of the state General Fund budget.
- Eliminate the structural deficit by adopting a five-year plan to spend only recurring revenues for recurring obligations.
- Prioritize spending on areas that invest in the future, such as education and economic development.
- Eliminate the practice of appropriating all anticipated revenue and ensure the state’s “rainy day fund” has adequate resources to cover the state’s emergency needs.