Daily Independent (Ashland, KY)

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February 6, 2013

Beshear comes out strong for tax reform

Governor: Education needs reliable funding

FRANKFORT — Politically secure after re-election to a second term, the Kentucky governor, who has presided over $1.6 billion in budget cuts in five years, called on lawmakers Wednesday evening to step up and tackle the state’s persistently stagnant revenue problems.

Gov. Steve Beshear came out forcefully for tax reform in his annual State of the Commonwealth speech, saying education and Kentucky’s future are at risk and nothing – not even the need to reform the state pension systems – should overshadow the necessity of finding dependable, reliable funding for education.

Beshear seemed to aim his somber, at times almost funereal  speech squarely at 138 lawmakers rather than the wider electorate.

Reiterating dire warnings his cabinet secretary, Mary Lassiter, made to the legislature’s budget committees on Tuesday, Beshear said as bad as things look, “the good news is we know what we have to do.

“But delay could be deadly,” he said.

Beshear was referring to recommendations of a Blue Ribbon Commission on Tax Reform led by Lt. Gov. Jerry Abramson that offered 92 recommendations which would raise an additional $650 million to $690 million a year.

The recommendations would increase cigarette and utility taxes as well as extend sales taxes to some unspecified services. It would lower top corporate and individual tax rates while adding an individual tax bracket and reducing several business taxes. The commission also called for a lower cap on total tax deductions and for taxing retiree benefits and income above $30,000.

Beshear conceded passage of tax reform isn’t likely in the regular session, saying his agenda “is not only for this short session but also for the year ahead” – an obvious implication that he intends to call for a special session to pass tax reform.

“By the end of this session, we must have moved closer toward an agreement of both what needs to be done – and, just as important – how to pay for it,” Beshear said.

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