Regional
1:42 pm
Fri February 18, 2005

House Leaders Agree On Plans

Frankfort, KY – House Democratic and Republican leaders have agreed on tax and spending plans, but now face the task of selling them to rank-and-file members who are worried about political repercussions.
The tax package makes some substantial changes from the one proposed by Governor Fletcher, who met with lawmakers Friday morning and then cancelled scheduled appearances so he could review it.
Instead of Fletcher's 31 cent increase in the tax on a pack of cigarettes, lawmakers went with a 26 cent rise. Their plan also includes no provision for future increases based on taxes in surrounding states as Fletcher's did.
Rather than add the existing 6% sales tax to retail sales of alcohol as Fletcher proposed, the legislative proposal would increase the wholesale tax on alcohol from the current 9% to 11%.
On the individual income tax, legislative leaders agreed on a small reduction from the existing 6% rate to 5.8%.
They would raise the threshhold at which taxes must be paid at all to $18,800
annual income. The 6% rate would stay in effect for incomes above $75,000