Lawmakers begin 2014 session with philosophical gulf on education spending, tax issues

01/05/2014 08:36 PM

Democratic House Speaker Greg Stumbo said Friday his staff is working on a proposal for a sales tax increase to increase funding for education.

One evening earlier, the Senate Republican majority floor leader, Damon Thayer, declared he would oppose any tax increase proposal and didn’t see the need for an increase in education spending.

That sets up what is increasingly looking like the biggest debate of the 2014 General Assembly: whether the state can afford to increase money to schools — and how to do it.

Here’s what Stumbo told reporters in his Capitol office on Friday about taking one step further the local option sales tax proposal that many mayors are pushing:

Republicans, such as Thayer and Sen. Chris McDaniel of Taylor Mill, are not sold on the local option sales tax proposal, let alone a statewide sales tax increase.

Both Thayer and McDaniel said at Thursday’s Northern Kentucky Forum at NKU that they would oppose the local option sales tax plan. It would be a constitutional amendment that would allow cities to propose sales tax increases that would pay for specific projects. The cities’ voters would have to approve the tax. And it would go away once the designated project was completed.

While Thayer said he generally favors local control, he said cities already have the ability to raise taxes on properties, payroll and insurance premiums. And McDaniel said he was concerned that if the measure passed, cities would rely on incremental sales tax increases to cover the costs of basic responsibilities of government, like road paving.

As for education spending, Democratic Rep. Arnold Simpson of Covington and Thayer offered very different views on how necessary it was to increase funding. The SEEK formula that funds school districts has been flat-lined for the last five years. But an increase in enrollment has amounted to a cut in per-pupil spending.

Thayer said he would rather see government spending cut back. But with more than 70 percent of state revenue already designated for public schools (44 percent), justice and corrections (11 percent) and Medicaid (16 percent), that leaves a small slice from which to cut, he acknowledged.

Gov. Steve Beshear and his budget staff gets the first crack and writing the next two-year budget and will propose it later this month.

Thayer said he wants to wait to until Beshear unveils his first budget draft to comment in greater detail about spending priorities.


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