Stumbo stops short of calling tax group's work 'bold' but welcomes recommendations
12/07/2012 01:12 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.
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