Thayer says pension deal is in place; Proposal keeps car credit and drops gas tax
03/26/2013 02:56 PM
Senate Majority Floor Leader Damon Thayer, R-Georgetown, told reporters at 3:45 p.m. a deal was in place between House and Senate leaders to reform the pension system.
The latest proposal to fund the pension system came down from Gov. Steve Beshear on Tuesday afternoon with tweaks to tax changes and altogether dropping a tax cut on gasoline sales, but making up for the tax with a trade in credit on new cars.
And Thayer said the proposal is something the Senate can support.
“It’s all worked out, unless there are any last minute glitches, which I don’t anticipate. We’ll go into free conference committee here within the next hour,” Thayer said. “Hopefully by later this afternoon we will have one of the most significant policy achievements in recent memory for the Commonwealth of Kentucky.”
The proposal cuts in half a personal income tax credit to $10 per person, which would generate an additional $32.5 million to state general fund coffers.
By closing loopholes and creating incentives for taxpayers to pay taxes already owed the state can collect another $33 million in fiscal year 2015 and $37.4 million in fiscal 2016.
The state also will also collect $30 million in new revenue from several federal tax law changes within the federal government.
The changes proposed would provide $95.7 million in fiscal year 2015 and $99.9 million in fiscal year 2016 to fund the pension system.
A new change in the proposal calls for a trade-in-credit for new cars that would give back $34 million dollars into the transportation fund, which in effect would offset what could be seen as a tax increase of slashed personal tax credit.
Legislators have eight hours to go before the clock runs out on the 2013 regular session and the pension negotiation is but one of several big debates left to tackle.
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