Stumbo stops short of calling tax group's work 'bold' but welcomes recommendations

12/07/2012 02:12 PM

House Speaker Greg Stumbo, D-Prestonsburg, took a step back Friday from his previous critique of the Blue Ribbon tax commissions recommendations, saying the group has suggested some items he has long supported.

“It has some recommendations I have long favored, such as corporate tax reduction and an earned income tax credit. I also know we need more money for the pension situation and our schools as well,” Stumbo said in a statement Friday.

Stumbo added that he believed the General Assembly would keep an open mind on the tax commission’s recommendations.

The tax commission reached consensus on Thursday on a series of recommendations that would create $690 million in additional state revenue by raising taxes on cigarettes, eliminating corporate tax loopholes and applying sales tax to certain services.

The group also recommended adjusting the income tax rates on individuals. The recommendation would be to move toward a more progressive rate that would drop the income tax rate to 5.5 percent from 5.8 percent for most Kentuckians’ — those who earn between $8,001 and $75,000 a year.

The commission, made up of business leaders and education and health advocates and led by Lt. Gov. Jerry Abramson, must submit a final report outlining the recommendations to the governor by Dec. 15.

In a November interview with WFPL Stumbo told reporter Kenny Colston that he thought the commission was “backing away from the tough issues.”

More recently Stumbo told Pure Politics that by taxing the wealthier pensioners retirement income the group could raise needed revenue – which is something the tax commission ultimately recommended.

“I think it would have been bold to say here is a way to fund it by asking those in the system to contribute in some form or fashion,” Stumbo said earlier this week.

Meanwhile Gov. Steve Beshear said this week k he saw a way to link the tax commission’s additional revenue and the need for additional funds to pay toward fully funding the state’s payment into the state employee pension fund.

But taking up a tax measure in the 2013 session that begins in January might still be a long-shot. In the shorter legislative sessions during odd-years, each chamber would need a three-fifths super majority to pass any bill dealing with revenue. That could make it more likely tax reform would be done during a special session or in 2014.

“I could anticipate that perhaps we won’t get there by the time the regular session is over with and that will have to continue working and perhaps have a special session on one or both of those projects,” Beshear said.

About Nick Storm

Nick Storm joined cn|2 in December 2011 as a reporter for Pure Politics. Throughout his career, Nick has covered several big political stories up close, including interviewing President Barack Obama on the campaign trail back in 2008. Nick says he loves being at the forefront of Kentucky politics and working with the brightest journalists in the commonwealth. Follow Nick on Twitter @Nick_Storm. Nick can be reached at 502-792-1107 or nicholas.storm@twcnews.com.

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Comments

  • Mike wrote on December 08, 2012 02:35 PM :

    What does a 0.3% reduction in income tax do to people who already don’t make enough living to buy food and lodging, etc.?

    I didn’t read the whole article, so I hope there are significant increases in the basic deductible for individuals and families. I also would like to see all of our elected state officials who will be making these decisions live on $8,000 for one year, THEN make tax decisions.

    Ain’t gonna happen, of course. They are vested in the system to help THEM not us.

  • JDM wrote on December 10, 2012 11:10 AM :

    It is sad that the regular session has not begun, and already a Special Session is being discussed. Another unnecessary cost, added to the budget problems. Our elected officials have dragged trheir feet over tax reform and pension reform for years, yet they readily collect their salary & pension. Why not enter a session with the goal of fixing the problems, on time, and before they get bigger? Maybe that would be too efficient, and not allow enough time for partisan wars, grandstanding, fundraising, name-calling, fault finding, and all the other components of Gridlock.

What do you have to say?





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