Wayne files tax reform bill

February 05, 2013 | | Comments 0

State Rep. Jim Wayne, D-Louisville

By Beth Musgrave

FRANKFORT — A lawmaker who has pushed to reform the state’s tax code for more than a decade filed a bill Tuesday that would generate an additional $815 million in new revenue for the state.

Rep. Jim Wayne, D-Louisville, said much of the contents of House Bill 142 mirrors the recommendations of the Governor’s Blue Ribbon Commission on Tax Reform. Some key changes in Wayne’s bill include increasing the cigarette tax by $1 instead of 60 cents and doing away with some business tax breaks that were included in the task force’s recommendations. The task force’s recommendations included tweaks to the tax code that would generate approximately $659 million in new revenue.

Wayne’s bill also includes a state earned income tax credit that would benefit Kentucky’s working poor families and includes a slight increase in income taxes on the state’s top earners.

Wayne said Tuesday that he filed the measure to start the discussions about tax reform during the legislative session, which resumed Tuesday. Gov. Steve Beshear has said that he would prefer to tackle the politically thorny issue of tax reform during a special legislative session instead of the 30-day session. For a tax measure to pass in a 30-day session, a super majority is needed.

“It’s going to be a framework for discussion and debate,” Wayne said.

Cabinet Secretary Mary Lassiter told a joint meeting of the House and Senate Appropriations and Revenue Committee on Tuesday that Beshear would like to discuss the task force’s recommendations with House and Senate leaders to determine if there was consensus on any of the recommendations before proposing a bill.

During the meeting Tuesday, Lassiter outlined the state’s recent cuts — $1.6 billion over the past five years — and how those cuts have affected basic services. Lassiter said that although state revenues have improved, the state could still be looking at more cuts in coming years if new revenue is not generated.

“Our revenues are not growing with the economy,” Lassiter said. A group of economists hired by the commission this summer said Kentucky’s tax system has not grown with the state’s economy. By 2020, the gap between what the state needs to provide basic services and the revenue it generates will be $1 billion a year, the report projected.

Filed Under: KY General AssemblyState BudgetState GovernmentSteve Beshear

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