Herald-Leader Editorial

Time to tackle Ky. tax reform; Beshear must make tough decisions

November 13, 2013 

There is a reason tax reform in Kentucky seems to remain on the back burner. It's called political will — the lack of it.

Kentucky will never have true tax reform — something it desperately needs — without dedicated political leadership.

Herald-Leader reporter John Cheves laid out the challenge in a story Sunday about the lack of action on the latest tax reform effort.

"The easiest thing for a political candidate to say is, 'I will never raise your taxes," Rep. Rick Rand, D-Bedford, told Cheves.

Rep. Dwight Butler, R-Harned, said there are plenty of real needs, "with education being an obvious one." No one would argue that point.

But, as vice chairman of the House budget committee, he has no illusions. "Politically, however, it would take a strong will to get anything done, and I don't know who would take the lead."

Remarkable, and sad, that a member of the General Assembly sees no one in leadership who is willing to lead on this crucial issue.

But we also have a governor, and that's who should take the lead.

Gov. Steve Beshear appointed the task force, assigned his own lieutenant governor, Jerry Abramson, to lead it, and pledged that it wouldn't be forgotten like other studies before it.

Beshear is well positioned to make this happen. Under him, Kentucky is enjoying positive national exposure seldom experienced outside of sports for the successful roll-out of the state's health insurance exchange.

And Beshear is not burdened by his next race for office. He can't run for re-election, and at 69, he has expressed no interest in running for anything else when he leaves office in early 2016.

Kentucky is on a course that is already causing enormous pain and, in the words of one representative, could lead to a financial crisis. Instead of growing with the economy, tax revenue is lagging it.

That's because the tax system we have is based on a very different economy than the one we have now.

Good, some anti-taxers might say. But, the necessary side effects are bad: higher college tuition, less money for textbooks in local schools, pay freezes and furloughs for state employees, public-health departments reducing hours and cutting back on immunizations. All things that will make a poor and sick state poorer and sicker.

Beshear's task force did not produce a very good plan for tax reform. A national, non-partisan group called it "a disappointing grab bag."

The essential elements of tax reform are not a secret: broaden the base and lower rates. That means capturing economic activity — like the burgeoning service sector — that is not being taxed now, and cutting out exemptions.

It can be done. But it takes leadership.

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