Every time the budgetary ax falls in Kentucky, the cries for tax reform grow a little louder.
The topic has been discussed for many years, with a blue ribbon commission led by Lt. Gov. Jerry Abramson proposing 54 changes in 2012 that became the basis for Gov. Steve Beshear’s tax reform plan in this year’s legislative session.
Beshear’s idea hinged largely on cutting individual and corporate income tax rates while charging Kentucky’s 6 percent sales tax on some services, with an estimated $617 million in this biennium and $209 million per year beyond in tax revenue gains.
But Beshear’s tax proposal was never drafted into a bill, although Abramson testified before the House Appropriations and Revenue Committee about details of the plan.
Beshear’s decision earlier this month to fill a $90.9 million gap in the 2014 fiscal year’s budget with a combination of fund transfers, excess appropriations and budget reserves has raised the issue to the forefront of next year’s legislative session, tax reform advocates say.
Some point to businesses’ decisions to leave the state as further cause for concern, while others say spending pressures on education, pensions and other government services should prod lawmakers to consider overhauling the state’s tax system.
Refining and perfecting