Frankfort, KY - The state's outmoded tax code is about to meet 23 powerful players in the state who will look to find solutions over the next eight months to allow it to match the state's economy.
Gov. Steve Beshear signed an executive order Thursday charging a the 23 on a blue ribbon commission the task of fixing the state's revenue stream.
"Our revenue over the past decade has grown at 70 to 75 percent of the rate of growth of our economyÖ Our revenue system isn't doing the job we set it up to do," Beshear said at a Capitol press conference Thursday afternoon.
"Our overarching goal is to align Kentucky's tax structure with the principles of fairness, economic competitiveness and a 21st century economy," Beshear said.
The group will be working under its Chairman, Lieutenant Governor Jerry Abramson to find a new structure that will meet five goals:
Fairness: The tax system should treat people equitably. The Commission will review the tax burden that different taxpayers shoulder, from Kentucky families to Kentucky businesses, from small businesses to big businesses, and within different industry sectors in the state.
Competitiveness: Any changes to the tax system should ensure that Kentucky continues to attract jobs and investment to the state, while keeping and protecting the jobs and businesses we already have. The Commission will review how Kentucky's tax environment compares to other states and identify ways to improve business tax competitiveness.
Simplicity and Compliance: A tax system should be easy to understand and follow. The Commission will make recommendations to ensure compliance with Kentucky's tax system is simple for individuals and businesses and to ensure efficient administration by the state.
Elasticity: The tax code should allow state revenue performance to mirror economic performance. While Kentucky's code has performed relatively well during the recession, revenue growth has not kept pace with changes in the economy.
Adequacy: The Commonwealth's tax structure should generate sufficient funds to support critical state services. The Commission is charged with reviewing the adequacy of revenues from the current tax structure and making recommendations for improvement.
The commission will meet openly including public hearings in the state's six congressional districts before issuing a report back to the governor by Nov. 15th with the aide of a consultant that is yet to be hired.
From there, Beshear said he will take their findings to the legislature, though it is not known at this point if that will occur during the regular 30-day session in 2013, or in a special session late this year or sometime next year.
Business Lexington
Abramson, the commission's chairman, told he will run the group as the state's No. 2 official would, not how he might have in his former capacity as mayor of Louisville, where he was referred to as "Mayor for Life."
"The experience I've had in terms of economic development regarding the incentive packages, the experience I've had in terms of the difficulties of education funding that has a direct effect on having a competitive workforce, a skilled and educated workforce, all those are areas I've had to deal with. I've worked with the sales tax, I've worked with the beverage tax, I've worked with the income and the property, so I think I have a pretty good feel for the entire array of taxes we're going to be working with," he said.
The other members of the commission are:
Roszalyn Akins, Lexington
Pat Mulloy, Louisville
Jason Bailey, Berea
Dr. Sheila Schuster, Louisville
Jim Booth, Inez
Stu Silberman, Lexington
Junior Bridgeman, Louisville
Dr. Lee Todd, Lexington
Rocky Comito, Shepherdsville
Leslie Weigel, Bowling Green
Luther Deaton, Nicholasville
John Williams, Paducah
Marion Forcht, Corbin
Joe Wright, Harned
Rick Jordan, Walton
Cathy Zion, Louisville
Six non-voting, ex officio members will represent the General Assembly:
House Majority: Rep. Rick Rand (D-Bedford), Rep. Jim Wayne (D-Louisville)
House Minority: Rep. Bill Farmer (R-Lexington)
Senate Majority: Sen. Bob Leeper (I-Paducah), Sen. Paul Hornback (R-Shelbyville)
Senate Minority: Sen. Gerald Neal (D-Louisville).