Kentucky's state income tax rate is between 2-6%. If it would only take 20% increase in state tax receipts to make their pension system solvent, that's just a

Kentucky's state income tax rate is between 2-6%. If it would only take 20% increase in state tax receipts to make their pension system solvent, that's just a little over 1% increase in effective tax rate, which would still leave KY in the lower half of states by tax burden. If you make the tax rate change a bit more progressive, say 2% at the top, it could be zero change in income tax burden at median income and below. Kentucky also gives favorable tax treatment to retirement and pension income, so if you wanted to reduce a percived moral hazard of who pays and who benefits, KY could simultaneously reduce the preference given to lower the required rate changes further. Increased taxes can solve the situation fairly trivially, and still leave KY in the middle of the pack for total tax burden.