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Tax hikes on booze, smokes closer to becoming new law


It wasn’t quite the Boston Tea Party. But Kentucky bourbon industry officials stood shoulder-toshoulder Tuesday and emptied bottles of bourbon on the state Capitol’s front steps to protest a proposed 6-percent sales tax on all booze.

“They’ve always been taxing us to death over the years,” said Jimmy Russell, master distiller at Lawrenceburg, Ky.-based Wild Turkey, moments after pouring out an entire bottle of bourbon into a pile of melting snow.

The display capped off a showof force protest by industry supporters and executives that included beer and bourbon trucks circling the Kentucky Capitol throughout the morning. Inside, a few hundred ing, holding signs or wearing stickers.

The House Appropriations and Revenue Committee approved the proposal on Tuesday in an effort to offset a projected $456 million revenue shortfall in the fiscal year that ends June 30.

The plan would also double the state’s tax on cigarettes, raising it from 30 cents to 60 cents a pack, generating about $81.5 million a year. The alcohol tax would be expected to generate an additional $97.9 million a year.

Gov. Steve Beshear has proposed a 70-cent per pack increase in cigarettes, along with cuts of about 4 percent to many state government agencies. House lawmakers last year passed a 25-cent increase on the price of cigarettes, but the measure stalled in the Senate.

This year, Senate President David Williams, a Burkesville Republican, supports the plan, which legislative leaders negotiated in private. Williams said Tuesday he believes raising additional revenue for state government, “is the responsible thing to do.”

Lawmakers are hoping to get the bill to the governor by Friday.

House Speaker Greg Stumbo, a Democrat from Prestonsburg, said he expects the tax plan to come before the full House for consideration on Wednesday, which would keep it on schedule. Stumbo said he didn’t believe the liquor industry’s protests would affect the vote, or hurt Kentucky’s economy.

“They’ve got a right to do what they feel like that they have to do, but I don’t think it really changed anybody’s minds,” Stumbo said.

Beshear said the vote showed a commitment by House and Senate leaders to resolve the state’s budget problems.

“It is a responsible and thoughtful approach that mixes revenue enhancements with additional cuts,” Beshear said in a statement. “By this action, they have indicated their willingness to make the difficult choices necessary to preserve the priorities I articulated — and values we all share — education, health care for our most vulnerable and public safety.”

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