State Facts
Analysis
Kentucky scores well on fiscal policy, about average on personal freedom, and least well on regulatory policy.
Kentucky’s tax burden is low, at 8.8 percent of personal income, but that seems unsustainable. The big fiscal problems are debt, government spending, and government employment. The debt burden is one of the highest in the country, at 29.2 percent of income, having risen 6 percentage points since FY 2000. Kentucky is also highly fiscally centralized. Government consumption plus subsidies sits at 11.8 percent of income, and public employment is 14.5 percent of private employment.
Telecom has been deregulated. Land-use planning is almost nonexistent, but only token eminent domain reforms have been enacted, and there are no state-level restrictions on regulatory takings. Labor laws are subpar, since the state lacks a right-to-work law and restricts workers’ compensation insurance options. Health insurance freedom is a tad worse than average, though much improved since the state’s failed experiment with community rating in the 1990s. Benefit mandates are a bit higher than average, and the state has “prior approval” requirements for premium changes. Occupational licensure ranks better than the national average, but the state needs to do more to relax health profession scope-of-practice restrictions. The court system is below average.
Kentucky’s gun control laws are among the lightest in the country. It is easy to carry openly (without a permit) or concealed (using shall-issue permits), and there are no significant regulations on purchasers or dealers. Beer and wine taxes are among the highest in the country. Marijuana, marriage, and gambling laws are unsurprisingly ranked below the national average. Raw milk is banned. Home and private school laws are fairly liberal, but school choice needs to be expanded. The incarceration and drug arrest rates are extremely high, even as arrest rates for other victimless crimes are extremely low. Kentucky has the second freest environment for tobacco in the country. Campaign contribution limits are notably strict.
Policy Recommendations
- In order to reduce debt, tighten the rules for municipal bond issuance and cut spending, particularly on grants to local school districts, employee compensation (repeal the prevailing wage law), and retirement.
- Legalize independent practice by nurse practitioners and dental hygienists, and allow nurse practitioners and physician assistants full prescription authority.
- Reform sentencing for nonviolent offenders with a goal of reducing incarceration rates to national norms. This reform alone would have boosted Kentucky 10 places in the personal freedom ranking.
