Daily Independent (Ashland, KY)

Local News

February 11, 2014

Budget committees get look at tax reform proposal

FRANKFORT — The Senate and House budget committees got their first real look at Gov. Steve Beshear’s tax reform proposal Tuesday, but there wasn’t any immediate indication it is likely to pass.

Lt. Gov. Jerry Abramson, who headed up a Blue Ribbon Commission on Tax Reform appointed by Beshear two years ago and from whose report Beshear draws most of his plan, briefed the Senate and House Appropriations and Revenue committees Tuesday.

The briefings provided little new information, and questions from the House committee were relatively few with most lawmakers prefacing their questions or comments by commending the governor for putting forth a plan.

But House A&R Chairman Rick Rand, D-Bedford, said the “process is just the starting point for discussion” and reminding reporters that Beshear said he won’t demand either chamber pass a bill unless there is a “consensus” between both and both parties.

Later in the day, House Speaker Greg Stumbo, D-Prestonsburg, again called the prospects “daunting” for passing such a significant — and politically controversial — measure in an election year when all 100 House seats and 19 of 38 Senate seats are on the ballot. The state General Fund budget has been cut $1.6 billion since 2009 and without some form of new revenue, Beshear says the budget for the next two years will also contain “harmful cuts” to services “vital to Kentuckians.”

Some lawmakers appear to prefer turning to casino gambling to produce new revenue but prospects for that also appeared to grow dimmer Monday night when the Senate Republicans caucused and announced they don’t have enough votes to pass a constitutional amendment proposed by Caucus Chair Dan Seum, R-Louisville.

The bill Abramson took to the budget committees proposes a variety of “targeted” tax increases and reductions which would net the state about $210 million more in its first year or so.

A major revenue producer is application of the 6 percent sales tax to selected services — labor on equipment repairs and installation such as automobiles; some commercial, residential and personal services such as lawn care, janitor services and warranty services contracts; and recreational services such as golf course and country club fees, campgrounds and fitness and recreational services.

It would also limit tax exemptions for private retirement income (excluding Social Security), raise the cigarette tax from 60 cents to a dollar a pack and tax electronic cigarettes.

But those revenue gains would be offset in part by reductions in the top corporate and individual income tax rates; reduced taxes on industry; and a refundable Earned Income Tax Credit for lower income groups.

Most questions from lawmakers centered on the retirement income changes – currently retirement income is exempt up to $41,100, significantly more than most states. Beshear wants to tax retirement income when a filer’s adjusted gross income reaches $80,000 and would eliminate the exemption for those with adjusted gross income of $100,000 or more.

Abramson said those changes would affect about 90,200 Kentuckians whose average AGI is about $215,000.

Rep. Jim Wayne, D-Louisville, who was a non-voting member of the tax reform commission, said the proposal doesn’t do enough to help low income groups and said some of the tax benefits to existing business and industry in Kentucky won’t help recruit “a single job.”

No action was planned or taken on the bill Tuesday by either committee.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

Text Only
Local News
  • Families invited for Fun in the Park

     Free cotton candy, hot dogs and entertainment for an entire day is what Bridges Christian Church in Russell is offering local families during Fun in the Park this weekend.

    August 1, 2014

  • AEP reports stolen copper, fence damage

     All that glitters is not gold — sometimes, it's also copper.

    August 1, 2014

  • Probe of Fairview begins

    Four investigators from the state Office of Education Accountability spent much of Thursday interviewing school officials in a probe of alleged school law violations in the Fairview Independent School District.

    July 31, 2014

  • Grant helps Elliott County High School with $1.7 million geothermal renovation

    Elliott County School District Superintendent Dr. Carl Potter II remembers the night a few years ago when the lights went out in the middle of an Elliott County boys basketball game and interrupted it for some 20 minutes while the lights powered up.

    July 31, 2014

  • Heroin overdose deaths continue to rise

    The Kentucky state legislature passed a sweeping overhaul to its prescription drug law in the summer of 2012 after a flood of overdose deaths, making it significantly harder for people to access dangerous addictive drugs from doctors.

    July 31, 2014

  • Morehead man faces drug charges

    A Morehead man is facing multiple drug charges after taking possession of a suspicious package mailed to his home on Dillon Lane, according to the Kentucky State Police.

    July 31, 2014

  • Highlands’ Artists Market to begin today

    Up-and-coming artists are being offered a rare chance to show and sell their work during the First Friday art walk.

    July 31, 2014

  • Dogonline.jpg 'Educate and entertain'

    A local theater group is shooting for changing the area’s theater scene.

    July 31, 2014 1 Photo

  • 07/31/2014 — What's Happening

    Local news

    July 31, 2014

  • News in brief, 07/31/14

    About 450 marijuana plants were confiscated during an eradication effort in Lawrence County on Tuesday.

    July 30, 2014