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ISSUE: Tax reform
OUR VIEW: It will take a special session
Gov. Steve Beshear’s Blue Ribbon Commission on Tax Reform recently concluded its work and on Dec. 17 issued a 453-page report. It includes recommendations that, if adopted, would increase revenue to state government by some $650 million in the first year.
The report includes more than 50 recommendations that run the gamut from esoteric accounting measures to lowering personal income tax rates for most Kentuckians, even high-income earners.
Now the burden shifts to the General Assembly, which convened Tuesday for its short session.
Tax reform must share the stage with pension reform and redistricting — three of the most contentious topics ever debated in a state house. And each of the issues should be considered urgent.
The commission put a tremendous amount of work into its mission, and likely streamlined the way for some changes by eliminating unpopular ideas such as a tax on food.
We would have liked to see more recommendations of options to funnel money into city and county coffers, or at least some assumption of expenses, such as for jails. That kind of reform would be more easily accomplished given that legislators only can enable local governments to collect revenue and wouldn’t be in the position of levying a tax themselves.
If there’s an area in which the commision fell short, it is in not identifying more new sources of revenue that cumulatively could generate more than $650 million. That projection is for the first year, and assumes all of the recommendations are adopted. Some of the revenue sources would decline after the first year, such as cigarette taxes.
For the General Assembly to do its job, it can’t take an a-la-carte approach to tax reform — that likely would leave the state with less revenue, not more.
Better yet, legislators could adjust spending. But after several years of stagnation, it would be hard to find any additional “low-hanging fruit” to pare from the state budget.
As Rep. Jimmie Lee pointed out, legislators will convene in full session only for about 10 days, so expect a special session, probably to deal with all three major issues.
Either way, with a new senate president, it should be interesting watching; however, the last thing anyone wants right now is more drama about spending and taxes.
This editorial represents a consensus of The News-Enterprise editorial board.