"No matter what we do it is going to be controversial," Thayer says on tax reform

04/17/2017 12:32 PM

FRANKFORT — Gov. Matt Bevin has been crystal clear in his calls for a special session to address tax and pension reform later this year, but in the General Assembly there exists a lot more questions on what that will entail.

Senate Majority Floor Leader Damon Thayer, R-Georgetown, says currently the two bills, pension and tax reform, are not written and he envisions is taking several months to find agreement on the details once they are put together.

Because of the major task, Thayer is advocating for the special session to be called in September. He said that time frame would allow for an agreement between lawmaker and the executive branch, and still allow time for Bevin to sell the proposal to the people of Kentucky.

Recently the idea has been floated to potentially tax groceries. Thayer said he and his caucus are not talking specifics of any plan, but he did say if that was on the table he’d be in favor of a “massive cut or overall elimination of the personal income tax.”

“The only way that you can sell to people that taxes on consumption are going to go up or be applied more broadly is you have to say ‘look, you’re going to have more money in your paycheck every week or every two-weeks, because there’s going to be a massive cut or elimination of the personal income tax,” he said.

Gov. Bevin has been adamant that tax reform should create additional revenue to pay down the pension system. What an offset that Thayer proposes could do is ensure tax reform is revenue neutral — which would not align with Bevin’s stated goal.

“Nobody here as a Republican ran on raising taxes, but I think we did run on creating a tax code that is more business friendly,” he said.

When it comes to pensions, Thayer said the Senate is ready to deal with “everything outside the inviolable contract.” For Future employees of state government and teachers the Majority Floor Leader expects to see a “whole new system”

Thayer is proposing “more cuts to spending” when the two-year state budget is written in the next legislative session in 2018. However, he did agree that the state of pension funding is bad enough that the state “can’t cut ourselves” to solvency.

“I think it’s going to be really hard to sell to the taxpayers of Kentucky that they’re going to have to bear a tax increase to pay for public employee pensions,” Thayer said.

Of course, that could be the position lawmakers find themselves in during a special legislative session later this year.


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