Whitesburg KY
Mostly sunny
Mostly sunny
42°F
 

Cigarette tax would raise by 70 cents per pack under new plan




FRANKFORT

Gov. Steve Beshear has called on Kentucky lawmakers to raise the state’s tax on cigarettes by 70 cents a pack to help offset a $456 million revenue shortfall and avoid deeper cuts in government spending.

The Democratic governor released a proposal that also called for cuts of $147.1 million in government spending and tapping nearly $179 million from the state’s “rainy day fund” to get Kentucky through a turbulent economic period. Most education funding would remain unchanged, although some elementary and high school budgets would be cut 2 percent, under the plan.

“It’s going to require all of us to make some sacrifices,” Beshear said at a Capitol press conference. “No one is going to escape some of the pain and some of the sacrifices that have to be made.”

Kentucky is operating on a two-year $19 billion spending plan. But lower revenue projections have the state facing a $456 million budget shortfall in the current fiscal year that ends June 30. The problem is expected to worsen in 2010, although official estimates have not been made.

Beshear said he contemplated across-the-board slashes in government spending, but felt such cuts would be too severe. Instead, Beshear is calling for new revenue and offering lesser cuts to most government agencies, but preserving most funding for education, health care and public safety.

State police and public universities would be cut 2 percent under the plan. Other government agencies would face 4 percent cuts.

Beshear’s plan also calls for a three-day unpaid furlough for all state employees, a move that he said would save $8 million and eliminate the need for massive layoffs. He also proposed transferring more than $40 million to the general fund from restricted accounts.

The governor is touring Kentucky with his proposal, presenting it to audiences across the state.

Beshear said his proposals represent a starting point for discussions with state lawmakers, who are scheduled to convene in January.

“Is this plan perfect and a final solution? Absolutely not,” Beshear said. “I see it more as a starting point — a foundation if you will — for discussion about our values and how we protect them.”


Leave a Reply