TomMitsoff.com -- Our Bucks Stop There

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Our Bucks Stop There

BY TOM MITSOFF

That giant sucking sound you hear from the south is Northern Kentucky tax dollars being siphoned from the General Assembly's tax trough and redistributed elsewhere around the commonwealth - mostly in Frankfort.

A recent University of Louisville study - commissioned by Northern Kentucky's Tri-ED (Tri-County Economic Development Foundation), the Lexington Urban-County Government and Greater Louisville, Inc. - shows that Kentucky's three largest metropolitan areas subsidize state funding for the remainder of the state.

In Fiscal Year 2003, 43 percent of the state's General Fund revenue generated from NKY was reinvested elsewhere in the commonwealth, according to U of L Professor of Economics Paul Coomes' study. Coomes defines NKY as Boone, Bracken, Campbell, Gallatin, Grant, Kenton and Pendleton counties.

Pay More, Get Less?

According to the study, the seven NKY counties paid $1.433 billion in state and federal taxes controlled by Frankfort in Fiscal Year 2003 (July 2002 through June 2003). Of that, $874 million was reinvested back into the region, the study said. That means our residents and organizations paid $558 million more in taxes that year than the General Assembly reinvested here.

In FY 2003, $551 million in federal taxes paid by the seven NKY counties were funneled through Frankfort for redistribution. The Frankfort funnel sent only $313 million back here.

Coomes said the numbers are usually worse than that. FY 2003 was the year that highway construction projects serving the Sparta area near the Kentucky Speedway were funded. Without that anomaly, the tax gap would have been even wider for NKY, Coomes said.

"What is really out of whack there is your community and technical college funding," Coomes said. "Northern Kentucky puts in between 10 and 12 percent of the state's funding, but only gets back 1 to 2 percent of the community college funds (for Gateway Community College)."

While NKY taxpayers paid $558 million more in taxes than the region got back from the state, Frankfort taxpayers got quite a bang for their buck. The Legislature sent $559 million more to Anderson and Franklin counties (Frankfort's "micropolitan" region, as defined by Coomes' report) than taxpayers there paid. Those two counties' population in 2002 was 67,762, compared to 388,811 in the seven-county NKY region.

More Bad News

Some other bad tax news for the seven NKY counties, contained in the Coomes Report:

Only Louisville had higher deficits among Kentucky metro areas than NKY. Louisville residents paid $937 million more in state taxes than were reinvested in the region, and $643 million more in federal taxes than what came back to them. Lexington was third, behind NKY, in both categories.

Overall, 64 cents of every Northern Kentucky state tax dollar was re-invested in NKY - behind only Louisville (59 cents) for the state's lowest rate of return. That means that 36 cents of every dollar NKY sent to Frankfort was invested in other parts of the state.

Kentucky has 176 school districts, and seven of the 12 districts receiving the lowest per-pupil funding from the state are in NKY: Beechwood ($2,515), Boone County ($2,538), Fort Thomas ($2,571), Kenton County ($2,890), Campbell County ($3,503), Southgate ($3,305) and Erlanger-Elsmere ($3,325). (Cloverport Independent Schools - with around 250 students - in Breckenridge County receive the most funding per pupil at $6,873.)

Six of the 10 Kentucky school districts which receive the smallest percentage of their budgets from state funding are in NKY: Fort Thomas (34.8 percent), Beechwood (36.1 percent), Boone County (37.6 percent), Campbell County (41.4 percent), Kenton County (43.7 percent) and Covington (43.8 percent). Highest in the state is Jackson Independent Schools at 78.8 percent, and the lowest is Anchorage Independent Schools at 19.1 percent.)

This story was published January 16, 2005, in The Sunday Challenger, serving Northern Kentucky.