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Beshear’s tax reform plan gathering dust alongside eight previous proposals

By John Cheves
jcheves@herald-leader.com

In 2012, having slashed $1.2 billion in state spending during his first term, Gov. Steve Beshear named two dozen people to a “blue-ribbon commission” to study Kentucky’s tax code and suggest reforms to help the state budget keep pace with demand for services.

Beshear said this report would not end up like eight previous reports on the tax code since 1995, which got stuck on shelves around Frankfort to be forgotten. Ignore the skeptics, he said at a February 2012 news conference.

“I would say to them to fasten their seat belts,” Beshear said. “Get ready for not just another study but for some proposals that I think can refashion Kentucky’s future.”

Twenty-one months later, there’s no need for a seat belt.

Led by Lt. Gov. Jerry Abramson, the commission spent 2012 listening to economists, taxation experts and hundreds of concerned citizens at statewide hearings. At year’s end, it gave Beshear a 453-page report with scores of recommendations, many controversial, such as taxing more of retirees’ pension incomes, taxing some services and raising the tax on a pack of cigarettes from 60 cents to $1.

Taken as a whole, the proposals would have added $659 million annually to the $9.5 billion General Fund that pays for schools, police, prisons, social services, parks, environmental protection and other public needs. In addition, the report would have introduced scrutiny to the $12.1 billion that Kentucky gives away every year in largely unexamined tax breaks, some dating back to the Great Depression.

Beshear thanked the commission for its work. Then the report joined its eight predecessors on shelves around Frankfort.

Senate committee chairmen named

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — A freshman legislator has been tapped to head a key Senate committee and Appropriations and Revenue will continue to be run by an independent but will have a Republican vice chairman, Senate Republicans said Friday.

In a written release, Republican Senate Caucus Chairman Dan Seum announced that the Republican majority selected new chairs for legislative committees after meeting for two days this week.

Sen. David Givens of Greensburg will be vice-chairman of the powerful Appropriations and Revenue Committee with current chairman Sen. Robert Leeper, an Independent from Paducah. Both men ran unsuccessfully for leadership positions earlier this month. Leeper challenged Sen. Robert Stivers for the top job and lost. Givens was bested by Sen. Damon Thayer of Georgetown for the senate majority leadership position.

Republicans select Robert Stivers as next president of Kentucky Senate

By Jack Brammer
jbrammer@herald-leader.com

FRANKFORT — Robert Stivers, a Manchester attorney who has been the Senate majority leader for three years, will replace David Williams as president of the Kentucky Senate.

Sen. Damon Thayer of Georgetown, a proponent of expanded gambling in Kentucky, will be the Senate’s new majority floor leader.

The 23 Republicans who expect to be seated in January and independent Sen. Bob Leeper of Paducah met behind closed doors Tuesday for about three hours to select their leaders for the next two years.

Stivers and Senate President Pro Tem Katie Kratz Stine, of Southgate, who faced no opposition in her leadership re-election, must still be elected by the full 38-member chamber in January before officially taking office.

Senate budget chairman Leeper seeks Senate presidency

By Jack Brammer
jbrammer@herald-leader.com

FRANKFORT – Another state senator has entered the race for president of the Kentucky Senate.

Senate Appropriations and Revenue Chairman Bob Leeper, an independent from Paducah who usually sides with Republicans, said Thursday that he is seeking the position left vacant by the recent resignation of David Williams.

Williams, who was Senate president since 2000, resigned last week to accept an appointment by Gov. Steve Beshear to a circuit judgeship in south-central Kentucky.

Senate Majority Leader Robert Stivers, R-Manchester, said last week that he is hoping to run unopposed for Senate president.

Leeper, a chiropractor, said Thursday in a telephone interview that he has “no problems” with Stivers, “I just want to give members a choice.”

Beshear creates health benefit exchange; legislative panel rejects rental space for it

By Jack Brammer
jbrammer@herald-leader.com

FRANKFORT — Gov. Steve Beshear signed an executive order Tuesday to create an online marketplace offering health insurance plans for Kentuckians, as called for in the federal Affordable Health Care Act.

Shortly afterward, the Kentucky General Assembly’s Capital Projects and Bond Oversight Committee rejected, on a 3-4 partisan vote, a proposal by the Cabinet for Health and Family Services to spend $294,540 for rental space to accommodate 210 employees associated with the health insurance exchange.

Despite the vote, Finance Secretary Lori Flanery has the authority to override the oversight committee’s decision and let the rental project proceed. Beshear said late Tuesday that Flanery will sign the lease “in order to make sure that we don’t fall behind on implementation and run the risk of a federal takeover of our health benefits exchange.”

Sen. Bob Leeper, an independent from Paducah who usually sides with Republicans, said he could not support the rental lease because he was reluctant to put his name on anything related to “Obamacare.”

Special session ends after pain pill bill, transportation budget win approval

UPDATED AT 7:20 P.M.

By Jack Brammer and Beth Musgrave
jbrammer@herald-leader.com

FRANKFORT — A five-day special legislative session that cost taxpayers more than $300,000 ended late Friday afternoon after Kentucky lawmakers approved a transportation budget and a bill aimed at curbing prescription drug abuse.

The contentious session wrapped up quickly after leaders in the Republican-led Senate and Democratic-led House begrudgingly accepted compromises on both bills, which they had failed to approve in the final hours of the regular legislative session on April 12.

The Senate backed off a proposal to restore about $50 million worth of road projects in and near Senate President David Williams’ Southern Kentucky district that Gov. Steve Beshear had vetoed earlier this week.

Meanwhile, the House accepted an anti-drug abuse bill that keeps the state’s electronic prescription monitoring system in the Cabinet for Health and Family Services — and out of the hands of law enforcement agencies eager to investigate doctors who over-prescribe addictive medications.

Senate committee puts Williams’ vetoed projects into road budget

By Beth Musgrave and Jack Brammer
bmusgrave@herald-leader.com

FRANKFORT — The $50 million in road projects that Gov. Steve Beshear vetoed in or near the Southern Kentucky district of Senate President David Williams are back — for now.

In a surprise move Thursday, the fourth day of a special legislative session, the Senate budget committee added the projects to a bill containing the Transportation Cabinet’s operating budget.

The panel adopted by voice vote an amendment offered by committee Chairman Bob Leeper, I-Paducah, that restored the projects. The committee then approved the amended House Bill 2 on a 14-0 vote and sent it to the Senate, which is expected to consider it Friday.

If the changes become law, which seems unlikely, they would reverse Beshear’s decision on Wednesday to veto the road projects from the state’s two-year road plan. That bill was approved on April 12, the last day of the regular legislative session.

Leeper said he introduced the amendment “as a matter of principle” because it was not fair for the governor to direct his vetoes at one legislator.

House and Senate discuss differences on state budget bill

By Beth Musgrave
bmusgrave@herald-leader.com

FRANKFORT — After meeting for a little more than an hour Monday morning, House and Senate leaders agreed to return at 2:15 p.m. to resume negotiations on a more than $19 billion, two-year state budget.
The morning meeting focused on line-by-line differences between the House and Senate versions of the budget.

Senate budget committee Chairman Robert Leeper, I-Paducah, said there are very few major differences between the House and Senate budgets. Once some global decisions are made — particularly involving debt — there will be few decisions left to make, he said.

House budget committee Chairman Rick Rand, D-Bedford, said after the morning meeting that the break will allow both sides an opportunity to gather more information about why the other chamber made key decisions.

The House authorized $552 million in borrowing while the Senate version authorized $391 million. The Senate also booked savings throughout its budget by lowering the projected interest rates of bonds, which are at historic lows.

Kentucky Senate approves two-year budget; next, negotiations with House

By Beth Musgrave and Jack Brammer
bmusgrave@herald-leader.com

FRANKFORT — The Kentucky Senate approved an $18.5 billion, two-year budget Thursday night that includes little money for capital projects, eliminating $3.5 million each for the Kentucky Horse Park and a downtown Lexington redesign project that includes Rupp Arena.

The Senate voted 32-4 to approve House Bill 465. The Senate Appropriations and Revenue Committee passed the measure an hour before it was sent to the full Senate.

Now the House, controlled by Democrats, and the Republican-controlled Senate will appoint a committee to work out the differences between the House and Senate versions of the budget.

Senate President David Williams, R-Burkesville, said he was told late Thursday that the House would begin negotiations Monday. Williams said he would not speculate why the House wanted to wait until after the weekend. The University of Kentucky plays in the NCAA tournament on Friday in Atlanta.

Brian Wilkerson, a spokesman for House Speaker Greg Stumbo, a Democrat, said the House was going to work Friday but did not want to go into budget negotiations without knowing what the Senate had changed. The Senate passed the budget after the House had adjourned for the day.

“We want an opportunity to look at it first,” Wilkerson said.

‘Comment’ will discuss state budget, redistricting

This weekend’s “Comment on Kentucky,” a public affairs show of the Kentucky Educational Television network, will discuss Gov. Steve Beshear’s proposed two-year state budget and the redrawing of state legislative and congressional district boundaries.

Joining host Ferrell Wellman will be three journalists — Greg Stotelmyer, political reporter for WTVQ-TV in Lexington; Joe Gerth, political writer for The Courier-Journal; and Jack Brammer, political writer for the Lexington Herald-Leader.

The show airs live at 8 p.m. ET on KET1.

On Monday’s edition of “Kentucky Tonight” at 8 p.m. ET on KET and at www.ket.org/live, host Bill Goodman and guests will discuss the state budget.