Stumbo: No Kentucky Tax Overhaul Coming This Session

Feb 19, 2013

Kentucky House Speaker Greg Stumbo says he doesn't expect a tax reform package to be brought up for a vote in the current legislative session.

Stumbo told reporters Tuesday that such a package doesn't have the 60 votes necessary to pass in the House.

A special commission appointed by the governor proposed reforms that could generate about $690 million a year in additional revenue.

Stumbo said one of the proposals made by the commission could surface in days ahead as a method of shoring up Kentucky's weakening pension system for government retirees. That proposal calls for raising the cigarette tax from 60 cents to $1 a pack, which could generate $100 million for the pension system.

Daviess County Lawmaker Wants to Cap Kentucky's Debt

Feb 15, 2013
Kentucky LRC

Legislation to bar state General Fund debt from exceeding 6% has been approved by the full Senate. Republican Senator Joe Bowen of Owensboro has been pushing the measure since last year when a similar measure passed the Senate but died in the House.

Bowen said Kentucky now has $6.3 billion in debt and that, he says, translates to $14,589 in debt for every man, woman and child in Kentucky.

Bowen said lawmakers need to do the right thing by putting a limit on the legislature's credit card. The bill now goes to the House where it faces a shaky future.

Despite the end of the economic recession and a growth in state revenue, Kentucky’s budget will remain tight. Former Budget Director, now Cabinet Secretary Mary Lassiter will address a joint House and Senate budget committee Tuesday.

She is expected to say state programs and agencies should not expect cuts in recent years to be restored in the next State budget.  Lassiter tells the Courier-Journal, “There’s no money for anything.” 

Lassiter says any new revenue in the state budget passed in 2014 budget will be consumed by additional spending required for pensions, Medicaid, and replacing one-time funds being spent on recurring needs in the current budget.  She declined to say if the tight long-term revenue outlook will also be the theme of the State of the Commonwealth address Gov. Steve Beshear is to deliver Wednesday night.

A recently-released poll shows that a majority of Kentuckians support expanded gambling.

In the Courier-Journal Bluegrass Poll, 60 percent of those polled said they support expansion. For the first time, a majority Eastern Kentucky resident support gambling. 

The support is for a so-called clean gambling bill, which would not include any protections for horse racing tracks.

That's the approach Governor Steve Beshear is planning for his next gambling push. But opponents of gambling say any potential bill will fail because supporters can’t choose a single strategy. Also, only one track, Churchill Downs, has endorsed Beshear's plan.

A new report by the Institute on Taxation and Economic Policy shows a big gap between Kentucky’s income levels on who pays taxes.

The report says Kentucky’s top 1 percent income bracket pays roughly 5 percent of the state’s income, while the bottom 20 percent pays 9 percent.

Middle income levels are saddled with a higher percent, the report said.

Jason Bailey, director of the Kentucky Center for Economic Policy, says the numbers show tax reform needs to happen quickly in Kentucky to better balance the burdens.

“This is one of the big issues that tax reform needs to address, the issue of the fairness of the tax system and the fact that there is inequity in who pays,” he said.

Lawmakers are likely to put off taking up recommendations by the state’s latest tax reform commission until a special session later this year.

Claiming it committed fraud, Kentucky Attorney General Jack Conway has filed a suit against a mortgage company.

Mortgage Electronic Registration Systems, or MERS, provides a marketplace for banks to trade mortgages and mortgage-backed securities.

Conway says it was set up by banks to avoid the fees that must be paid when mortgages are sold and to hide the true owners of those mortgages.

Conway's suit alleges MERS did not pay the proper fees in Kentucky. He's also suing under the Consumer Protection Act, because MERS foreclosed on many homes.

“About 300,000 mortgages in Kentucky are MERS mortgages right now," Conway said. "We are able to fine up to $2,000 per violation of the Kentucky Consumer Protection Act. We have that avenue of damages. And we also have the avenue to go after the recording fees that have been dodged as a result of this mortgage transfer scheme.”

New York, Delaware and Massachusetts have also filed suit against MERS.

Proponents of a local option sales tax have gained big ally in their legislative fight: Gov. Steve Beshear.

The local option sales tax would allow cities to levy an additional tax on top of the state’s current six percent sales tax for specific projects, if local voters approved the new tax.

Louisville Mayor Greg Fischer and Lexington Mayor Jim Gray are the chief advocates pushing the idea, arguing their cities would use the extra revenue for infrastructure projects.

Speaking on Wednesday to the Louisville Chamber of Commerce, Beshear says he’s all for the idea.

“Well you know politicians are famous for being on both sides of an issue so let me say this… I’m for it,” Beshear says.

To go into effect, lawmakers would have to amend the state constitution and then statewide voters would have to approve the amendment.

Understanding that veterans have a higher unemployment rate than the population as a whole, Kentucky Agriculture Commissioner James Comer is launching two programs to help veterans find work.  The Homegrown by Heroes initiative will place a label on food items produced by Kentucky veterans. 

It's like the Kentucky Proud symbol, but includes a flag in the background and a veteran saluting.

"We've been getting calls from many other states and this is something I believe will be a nation model as a way to help market farm products by our military veterans," Comer remarked at a news conference Tuesday at the Boone National Guard Center in Frankfort..

Comer is launching another program called Kentucky Proud Jobs for Vets.  The initiative will maintain a database of farmers and agri-businesses looking for workers.  The database will be shared with military support groups like USA Cares.  Comer says many people like hiring veterans because of their strong work ethic and service to the country.

The state Attorney General's Office says Friday is the last day for Kentuckians to file a claim to receive a payment under the national mortgage settlement.  Thousands of borrowers who lost their homes between 2008 and 2011 may be eligible to receive a payment.

The nation's five largest mortgage servicers agreed to the settlement with the federal government and 49 state attorneys general last year. 

"Basically this settlement settles claims by the attorneys general that during the housing crisis and foreclosure crisis in the United States, these banks had allegedly engaged in fraudulent behavior which included robo signing documents that it filed with the court," said Allison Martin, a spokeswman for the Kentucky Attorney General's Office.

Kentucky LRC

Kentucky legislative leaders say solutions on how to pay for Kentucky’s underfunded pensions won’t likely be addressed in the 2013 legislative session.

Both House Speaker Greg Stumbo and Senate President Robert Stivers say there will likely be a bill to introduce changes to the pension systems. But they also agree that such a bill is unlikely to deal how to fund the changes.

What they disagree on is when to deal with the funding solutions. Stumbo says pension funding should be dealt with in a special session, hand in hand with tax reform.

“There’ll be a bill, I don’t know whether it will be addressed," Stumbo says. "I think that we need, probably, to address the entire issue and that include the funding mechanism."

But Stivers says lawmakers should pass the changes now and deal with fully funding the pension system starting in 2014, when a new budget must be passed.

Elizabethtown Votes Down Liquor By the Drink Initiative

Jan 9, 2013

Voters in Elizabethtown have turned down liquor by the drink.

The News-Enterprise reports a liquor initiative failed Tuesday by 275 votes among fewer that 2,800 votes cast. Voters had overwhelmingly approved package liquor sales in October 2011.

Under commonwealth law, another referendum on liquor by the drink can't be held for three years in Elizabethtown.

Kentucky Mayors to Speak about Crippling Pension Costs

Jan 7, 2013

The mayors of Kentucky's two largest cities and other community leaders will call for legislative action to address rising pension costs and how they are impacting communities.

Louisville Mayor Greg Fischer and Lexington Mayor Jim Gray are planning to speak about the pension problems Monday morning at the Thomas D. Clark Center for Kentucky History in Frankfort.

The morning news conference will also preview a national report from the Pew Center on the States that addresses the impact of pension costs on cities, including Louisville.

Other officials scheduled to attend the event are Kentucky League of Cities director Jonathan Steiner and Kentucky Association of Counties president Tommy Turner.

The Courier-Journal is reporting that Kentucky Gov. Steve Beshear will consider proposing an expanded gambling package this year that does not include increased gaming at the state's horsetracks.

Beshear says that may be the only way he can get a gambling bill passed in the state legislature.

The Governor has tried unsuccessfully in the past to get a casino gambling bill through the Kentucky Senate. Expanded gambling supporters have hoped that last year's retirement of former Senate President David Williams, who opposed increased gaming, would better the bill's odds in 2013.

A decline in coal mining tax revenue has many of Kentucky’s top officials concerned. House Speaker Greg Stumbo and Governor Steve Beshear say they are worried about the declining revenues form the coal severance tax.

The tax is used for a variety of state, county and local infrastructure projects, mostly in Eastern Kentucky. Beshear says the drop in revenue reflects the tough market for Kentucky coal.

“I am concerned about the coal severance receipts, they are down, they’re down significantly. And that because coal mining is down significantly, the tons of coal mined has dropped.”

Beshear says exports, mainly to India and China, could help the revenues rebound. However, the first shipment of coal in a celebrated trade deal with an Indian company is months behind schedule.

Even as Air Force One was about to land in suburban Maryland this morning — bringing President Obama back from his vacation in Hawaii to resume negotiations aimed at avoiding the so-called fiscal cliff of automatic tax increases and spending cuts — Senate Majority Leader Harry Reid was on the floor of the Senate warning that a dive off that cliff seems inevitable.