Bill to lower Kentucky income tax heads to Gov. Beshear’s desk
FRANKFORT, Ky. (WYMT) - A move to further lower Kentucky’s income tax has advanced at the state capital.
The issue has already passed the House and, Wednesday morning, a Senate panel easily passed the additional half percent cut.
The bill has now been sent to Governor Andy Beshear’s desk for his signature or veto.
There was very little, if any, debate in the Senate Appropriations and Revenue committee meeting. The bill passed the committee by eight yes votes and just one pass vote.
The bill sets in place the half-percent cut that took effect in January and also next year’s further half-percent cut. The income tax will drop from 4.5% to 4%, and it will likely go down more from that in future years as long as certain financial triggers are met.
The goal is to eventually do away with Kentucky’s income tax. Part of that revenue is being offset by new sales and service taxes.
However, opponents say for every one percent cut you’re reducing $1 billion in state revenue and it’s too tough to make up for that.
“My concern about the continued reduction in the income tax rate is that the formula on which the cuts are based is static, backwards facing and based on a single year,” said Pam Thomas, Kentucky Center For Economic Policy.
Proponents say it’s smart to return money to those that pay it.
“Was not a hasty piece of document that was proposed. We worked through lots of iterations to get to the right place,” said Sen. David Givens, R-Greensburg. “The safety valves are built in that I am confident that we will be able to sustain the growth of the economy in Kentucky.”
The bill is expected to be voted on in the full Senate, possibly as early as Wednesday afternoon when that chamber gavels in at 2 p.m. When it passed the House in early January, it was largely along party lines, Republicans for and Democrats against.
Governor Beshear is expected to veto the legislation, but the Republicans have enough members to override that in both chambers.
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