Beshear administration now must sell lawmakers on tax changes. Can it?

01/07/2013 06:45 PM

If much of the work of the governor’s tax commission is to become law, the administration must convince lawmakers and the public that areas like education and public protection will stagnate as state money is eaten up by other obligations, said Lt. Gov. Jerry Abramson.

Abramson, who headed up the governor’s commission that spent nearly a year examining and debating tax code changes, told Pure Politics on Friday that the government will be $1 billion short of its obligations by 2020 if nothing is done. That’s because of a combination of rising costs of government programs and a tax system that is too outdated to keep up with the current economy.

“We have got to carry that message to say you want your youngster to go to community college? Look what the tuition was and what it is today. You want better state police coverage? Look how many you had at the post 10 years and how many you have today,” Abramson said to sum up his sales pitch (at 3:20 of the video).

Gov. Steve Beshear, meanwhile, enjoys high job approval ratings. But Abramson said the governor still has to study the recommendations, which the group submitted to him on Dec. 17, before he decides what — and how — to push.

“I can help and carry that role,” Abramson added. “I can reasonably articulate what happened. I did chair (the commission) for eleven and half months, and I can answer the questions and try to carry the message of exactly where we are and what our options might be.” (at 5:00).

Last month, Beshear indicated tax reform would likely have to wait until after the 30-day legislation session to pass something. That’s because odd-year sessions require approval of three-fifths of each chamber to pass a revenue measure. Beshear has said tax reform might have to wait until a special session or 2014.

Also underscoring how difficult it could be to get a package of reforms through the legislature, Abramson disagreed with the suggestion by House Speaker Greg Stumbo that, as part of tax changes, the legislature should designate one revenue stream specifically for the financially beleaguered public pension fund. Stumbo cited, for instance, the commission’s suggestion to tax pension income starting at $30,000 instead of $41,000 per year.

“I think that might troublesome because the pension issue is a state government employee issue, the pension funding that is the taxes we are focusing on in terms of asking people to pay, that will come from pensions that are not only state employees but people that work at Ford, people who have worked at Toyota, people who have retired from International Harvester, etc,” Abramson said (at 6:25).

About Ryan Alessi

Ryan Alessi joined cn|2 in May 2010 as senior managing editor and host of Pure Politics. He has covered politics for more than 10 years, including 7 years as a reporter for the Lexington Herald-Leader. Follow Ryan on Twitter @cn2Alessi. Ryan can be reached at 502-792-1135 or ryan.alessi@twcnews.com.

Comments

  • viewer wrote on January 07, 2013 08:11 PM :

    Someone help me here with the true amount the state is on the hook for Danny Ford getting this cabinet appointment for the state. His base salary is $85,000.00 per/yr. With his age and friend Gov Beashear leaving in 3 years, he will probably retire then. So how much does this appointment put on the pension crisis when the multiplying factor of him transferring from his Senate tenure is considered? I know the 3 years at 85,000, but what will tax payers be out each year after he retires? Chris Toby this might be one for you. I am not singling out Ford, just using him as an example of the Governor’s new practice of appointing these positions to those with these pensions magnifiers at the tax payer’s expense.

  • Bill Huff wrote on January 08, 2013 07:55 PM :

    Since Ky lawmakers’ caused deficits through their inaction prompted partly by 1986 Grover Norquist’s “no tax pledge” allowing passage of “tax cuts’ ONLY unaccompanied by corresponding “tax enhancement”, and underfunding Ky Retirement Board’s actuarial contributions by an estimated 25% from 1994 through 2012 should not be hard to convince Ky lawmakers through use of a statewide TV campaign reminding Ky voters of their lack of stewardship!

    If Govenror needs backup secure cooperation of City officials in Erlanger, Fort Thomas and Covington whove been working to build alliances to make changes and spare their cities’ budgets. With total pension-system costs of Kentucky cities projected to balloon to three times their size in 2017 from what they were last year, Northern Kentucky officials are looking for allies to cut the pension payments cities make for employees.

    Florence last year made $1.3 million in pension payments for its employees. Without changes to the pension system, in 2017, that cost would top $4 million, assuming the same number of employees and an average of 3 percent annual raises.

    In fact Governor could enlist county officials to join in leading Ky lawmakers’ to immediately take action to lessen local govenrment’s load since it’s a known fact that 75% of Ky’s 120 county governments’ tax rates either does barely pay their bills or counties are facing bankruptcy.

    In July 2009 Lexington Herald an article entitled “TAX OVERHAUL MAY BE GAINING STEAM” as legislators, who are facing $500 to $750 million deficit in July 1, 2009 budget—-after haphazardly covering $456 million dollar deficit.

    2012’s Kentucky’s current obsolete tax base is incapable of sustaining current funding levels for services & benefits. In this article, tax reform was referred to in this way: “Farmer’s proposal includes doing away with the state’s individual and corporate income tax and moving to a sales tax system. [Rep] Wayne has proposed making taxes more equitable. The wealthiest Kentuckians pay the least in terms of percentage of their salaries, Wayne said. Wayne’s proposal includes a slight increase in taxes for the wealthiest citizens. But both Farmer’s and Wayne’s proposals call for more taxes on the service industry.”

    Asking Ky lawmakers to debate these two bills for “consensus” tax reform legislation to get Ky out of it’s current financial predictament is the right thing to do in 2014. Simultaneourly ask Ky lawmakers to debate cutting state expenses as follows:

    Cutting $350 million from an almost $1 billion of their legislation passing tax exemptions, tax deferments, tax credits, tax exclusions, tax deductions and perferential tax rate called state tax expenditures;

    Cutting $400 million or more of state corporate tax shelters;

    Cutting $138 million from non-merit payroll making $100,000 or more simulataneously including $20 million of personnel non-merit pay cuts to property tax administration and school superintendents:

    Collecting estimated $300 million of unpaid usage, property taxes and motor vehicle registration fees from an estimated 200,000 Ky car owner tax evaders;

    Eliminate truck weight-distance tax using “revenue neutral” tax strategy that combines truck registration fees with motor fuels & weight-distance tax revenues, then eliminating weight-distance tax!

    Bill Huff
    huff9983@roadrunner.com
    1.8.13

  • viewer wrote on January 08, 2013 09:19 PM :

    Mr. Bill Huff,
    We Kentuckians need more of people like you who think through our problems and have some sense of vision to find solutions. Thanks for your post and hopefully others who are educated can pass on wisdom for the public to help our elected officials work through this.

What do you have to say?





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