House Budget Chairman: Fate of tax reform could be linked to 'holes in the budget'

02/03/2014 10:48 AM

The governor’s proposed changes to the tax code, which are expected to be unveiled this week, lean heavily on many recommendations made in December 2012 by a blue ribbon commission and are most likely to be adopted if there are ‘holes in the budget,’ the House budget chairman said.

House Appropriations and Revenue Committee Chairman Rick Rand told Pure Politics in an interview last week that he had spoken with Gov. Steve Beshear about the proposal. He declined to talk about too many details, though.

“I’d say much of that would come from the blue ribbon commission, yes,” Rand said, referring to the group of business leaders and health and education advocates that spent much of 2012 debating changes in the tax code. The group’s stated goals would be to make Kentucky’s revenue better reflect and grow with the economy and make it more fair.

One of the key recommendations was lowering corporate and individual income tax rates and spreading out the 6 percent sales tax to certain services as consumption of services has become a greater part of the economy.

Rand said he “would be surprised” if that wasn’t part of the governor’s proposed bill.

Republicans in the legislature, though, have bristled at the prospect of a tax measure that immediately raises revenue, saying it would be akin to a tax increase. But Rand said he wants to see a proposal that will help immediately bring in extra revenue to help fund programs that otherwise could get cut.

“I don’t know why you’d be for a proposal that does not” raise revenue right away, Rand said. “It’s not that we need a huge influx of money now but we want probably some money to take care of immediate problems but something that looks to the future and growth.”

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