If there is one issue that nearly every legislator agrees on, it is that Kentucky needs comprehensive tax reform.
What passed the General Assembly last Friday and Saturday, however, was anything but that. Instead of tax modernization, we got a tax shift, meaning that the vast majority of working families will pay more so large businesses and the wealthy can pay less. That is why I voted against this plan, which will cost taxpayers about $400 million extra during the next two years.
A sizable portion of that will come from adding the six-percent sales tax to nearly 20 new services, including the labor to fix our vehicles, take care of our pets and get our clothes dry cleaned. The sales tax will be added as well to fitness centers and golf courses.
Many retirees will also be paying more under this law, since it lowers their income tax exemption from $41,100 to $31,100. That 25 percent drop will amount to hundreds of dollars for those affected by the full decline.
What makes this law even more troublesome is that it was written by a handful of people behind closed doors, with no input from Democratic leaders or the public that will now have to pay for it. Citizens could not even read it online before it cleared the General Assembly, which is not how major new laws, especially on something as important as taxes, should be enacted.
Organizations on both sides of the political spectrum opposed it, and Governor Bevin vetoed it. Nevertheless, many in the House and Senate voted last Friday to override a governor from their own party rather than sit down and come up with a solution that is more broad based and fair, something I have long called for.
Just as I opposed this tax plan, I was also against the budget that was written and approved in the same secretive and rushed way. While there are good things in it, it is inadequate in too many other respects.
Education at all levels will feel the biggest impact. Preschool services will be cut, and there is no money at all for new textbooks in our elementary and secondary schools. Per-pupil funding will increase slightly, by roughly 10 cents extra a day, but that is just not enough, since this amount is still below where it was a decade ago when adjusting for inflation.
Our public colleges and universities, meanwhile, will have to weather another significant cut. They will be able to get some of that revenue back, but only through a performance-based formula that pits regional universities against our two comprehensive ones, the University of Kentucky and the University of Louisville. I believe strongly that our schools should not have to compete for their base funding.
This budget also completely cuts state dollars for a wide array of programs that have historically been included in the past. That includes scholarship programs that have helped students in our region attend college and popular arts programs.
The General Assembly’s leaders were so rushed in passing a budget and tax plan early this month that we had to correct some of their mistakes this past weekend. Otherwise, we would have phased out a popular economic development program companies like Toyota use, and our coal counties would have suffered when it comes to their single-county severance taxes. Thankfully, those errors were corrected, but since these fixes are in new bills and the legislative session is now over, there is still a chance these changes could be vetoed by Governor Bevin. Hopefully he will not do that.
The governor had little input during this session, but he was most certainly heard on Friday the 13th, when he made some highly insulting remarks about the teachers and state employees who were rallying at the Capitol for more education funding and to oppose changes made in their public retirement systems.
I was proud to co-sponsor a resolution condemning the governor’s hurtful remarks, which accused the teachers of leaving their students vulnerable to sexual abuse and drugs because these teachers were exercising their right to be heard. The governor’s attempt to apologize on Sunday also fell far short of what he needed to say.
I want to thank those teachers and public employees who have been a welcome presence at the Capitol and whose numerous rallies in Frankfort and our communities have been a perfect example of democracy in action. Other legislators and I fought the changes made to their pension systems and will work to reverse this law however we can, either in court or during next year’s legislative session.
I will write about other actions taken by the General Assembly next week. For now, I want to say how much I appreciate everyone for letting me know their views on the issues covered during the past three-and-a-half months. I couldn’t do my job without it.
If you have any questions or concerns in the months ahead, my email is Angie.Hatton@lrc. ky.gov, and the toll-free legislative message line for me and all legislators is 800-372-7181. If you have a hearing impairment, the number is 800-896-0305.