Friday, December 30, 2011

Kentucky needs a debt ceiling

The biggest news story with the least amount of coverage in Kentucky in 2011 is easily Kentucky's debt problem.

Revenues continue to increase for the state and politicians in both parties continue to claim they need more revenue. But at the heart of the problem is that spending has increased even faster.

And that problem has been hidden by debt and unfunded liabilities. In order to believe that Kentucky's budget finished the last fiscal year in surplus, as the state claims, you have to ignore the money borrowed from the 2012 state Medicaid budget and ignore the unemployment benefits money borrowed from the federal government and ignore the money not paid into the state public employee benefits system and ignore the new billion dollars in bonded debt created in just the last year.

That's a lot of ignoring. And in 2012 we are going to have to get a handle on it.