tax reform

Kentucky Braces for New Sales Taxes on Sunday, July 1

Jun 27, 2018

Residents of this conservative state will begin paying a slew of new taxes next week because of a convergence of circumstances that could test voter loyalty in November.  Starting Sunday, prices for things like car repairs, tanning bed visits, veterinary care and gym memberships will jump 6 percent because of a new law passed by the Republican-controlled legislature.

Ryland Barton

This year’s Kentucky General Assembly was book-ended by turmoil, but over the course of nearly four months the Republican-led legislature was still able to wrangle the votes to approve politically volatile policies like changing pension benefits for public workers and overhauling Kentucky’s tax code amid intense protests from public workers, especially teachers.

The legislature also passed a variety of conservative measures like new abortion restrictions, an expansion of the state’s gang penalties and an overhaul of Kentucky’s workers compensation system.

J. Tyler Franklin

Gov. Matt Bevin says he will veto the entire two-year state budget and revenue bills passed by the legislature last week, saying that the tax plan isn’t comprehensive enough and the budget spends too much money.

The budget passed by the legislature included about $600 million more in spending than the spending plan proposed by Bevin back in January.

Most of the spending increases went towards K-12 schools and higher education, which education advocates say still received cuts but were funded at higher levels than in Bevin’s budget.

Mary Meehan | Ohio Valley ReSource

A tax reform bill that passed Monday by Kentucky lawmakers is now awaiting a decision from Governor Matt Bevin. Some economists are saying the tax plan is more of a tax shift from wealthy individuals to middle and low income Kentuckians.

 

The plan would reduce the income tax rate for individuals as well as corporations. It would also broaden the services that could be taxed, such as landscaping, pet grooming and janitorial work.

J. Tyler Franklin

Kentucky’s Republican-led legislature has passed a new two-year state budget that cuts much of state government in order to put more money into the state’s ailing pension systems.

But lawmakers also approved about $680 million in new revenue by expanding the sales tax to 17 services ranging from auto repair to country club memberships and raising the tax on cigarettes.

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Update: The Kentucky Senate has approved a $480 million tax increase by voting to expand the state sales tax to a variety of services.

The Senate voted 20-18 to send the bill to the House of Representatives, which also plans to vote on the measure Monday.

Senate Democrats objected because they said they were shut out of the process and did not have time to read the bill. Republicans said the bill had to pass Monday to preserve their right to overturn any vetoes from Republican Gov. Matt Bevin.

J. Tyler Franklin

U.S. Sen. Bernie Sanders will be in Louisville on Friday to rally opposition to the Republican tax plan currently making its way through Congress.

It’s the second time this year the Vermont senator has waded into the Republican-controlled waters of the bluegrass as he tries to put pressure on the state’s two influential senators — Rand Paul and Majority Leader Mitch McConnell.

J. Tyler Frankin

Gov. Matt Bevin Monday defended his proposal to change the state’s pension systems before a group of business leaders in Lexington.

Late last week, Bevin released a much-anticipated draft of a bill that would move most future and some current retirees onto less-generous 401(k)-style plans.

The proposal would also tweak benefits to current employees and retirees, drawing fire from state employee groups that say the changes would be illegal.

J. Tyler Franklin

Kentucky’s state budget director said Gov. Matt Bevin will soon enact mid-year budget cuts to help avoid a projected revenue shortfall at the end of the fiscal year.

Earlier this month, a panel of economists tasked with predicting how much money the state will bring in projected the state would be about $155 million short of its initial estimates.

That move cleared the way for Bevin to make an official budget reduction plan — spending cuts to state agencies that don’t have to go through the conventional budgeting process.

Governor Matt Bevin has been outspoken about overhauling Kentucky’s tax system. Bevin said he wants to get rid of the inventory tax, which is placed on a company’s inventory that is held in the state. That tax is used to fund local school districts, and some worry that eliminating the inventory tax will have a negative impact on education. Little detail has been released about what would replace that revenue.


J. Tyler Franklin

Adding to Kentucky’s financial woes, economists are predicting the state will bring in around $200 million less than originally projected this fiscal year.

The state’s Consensus Forecasting Group, a panel of economists that budget writers rely on to estimate how much money the state will make, predicted Kentucky will bring in a little more than $10.6 billion in revenue instead of the more than $10.8 billion initially estimated.

Becca Schimmel

Congressman Brett Guthrie said he’s not sure if his Republican colleagues in the Senate will be able to repeal and replace Obamacare this year. He made these comments at a town hall style gathering Wednesday in Bowling Green.

Guthrie said he supports repealing and replacing the Affordable Care Act at the same time. The Bowling Green Republican said the House did its job by sending a bill to the Senate that would have accomplished that task. But the Senate wasn’t able to get 50 votes to pass several versions of reform. Guthrie said he isn’t sure if repeal and replace will happen this year.

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Jim Carroll started working for Kentucky’s state parks system in 1978 making $780 a month.

“So I knew the pay wasn’t good but I knew that it was a place where you could advance over time,” Carroll said. “It was stable, and retirement was part of that.”

Carroll later worked in the tourism cabinet and retired in 2009. Since then, he’s organized a group of concerned state pensioners called Kentucky Government Retirees.

Carroll draws a monthly pension from the retirement system for most of Kentucky’s state workers, Kentucky Retirement Systems. Depending how you measure it, KRS has one of the lowest funding levels in the nation.

Beshear Offers Tax Overhaul Plan

Feb 4, 2014

Gov. Steve Beshear has proposed sweeping changes to Kentucky's tax code that include lowering tax rates for individuals and businesses and expanding the sales tax to more services.

The state's cigarette tax would increase to $1 a pack under the plan.

Beshear said Tuesday his package includes 22 changes to the tax system. He calls it a "beginning point" in discussions with lawmakers to modernize the tax system to make Kentucky more competitive.

The Democratic governor proposes applying the state sales tax to labor charged to fix such personal property as automobiles and computers.

The sales tax also would apply to admissions to fitness centers and golf courses under the plan.

Beshear says his plan would increase state General Fund revenues by nearly $210 million per year once fully implemented.

In his seventh state of the Commonwealth address, Kentucky Gov. Steve Beshear told lawmakers that he will seek to reinvest in education, while also urging the General Assembly to reform the state's tax code.

The nearly 50-minute speech touched upon a variety of topics, including the state’s implementation of the federal Affordable Care Act, gains in auto manufacturing and the implementation of new education standards.

In stressing his latest priority, Beshear said that he would make cuts to other programs in order to  reinvest in education. To make up some of the funds, the governor pleaded with lawmakers to act on tax reform this year.

“I realize that tax modernization is a sensitive topic, especially in an election year. But the people elected us to tackle difficult issues. So engage with me. I ask you to engage with me on a core weakness that is keeping the Commonwealth from reaching its potential.”

Beshear offered few details on the kind of changes he wants to see in the tax code.

After the speech, Senate President Robert Stivers said he will need specifics in order to have a discussion on the issue.

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