Gov. Matt Bevin offered to take the heat for Republican lawmakers in his State of the Commonwealth address Wednesday when he said an overhaul of the state’s tax code would not be revenue neutral.
“I’ll say this and people who supported me … won’t like this,” Bevin said. “This is not going to be a tax neutral tax plan. It’s not. We can’t afford for it to be. That’s a straight up fact.”
A day later, though, House Speaker Jeff Hoover said many of the 64 Republicans in the Kentucky House of Representatives have little interest in raising taxes.
“I think it would be problematic for a lot of our members at this point,” said Hoover, R-Jamestown. “But we have a tremendous financial problem facing this state in the form of funding our pension systems … it’s something that obviously we’re going to look at when he gets the proposal to us and it’s a tough issue.”
Bevin has had meetings with Republican leaders but has not yet released a proposed tax plan to lawmakers. House Republicans recently recommended Rep. Steven Rudy, R-Paducah, and Rep. David Osborne, R-Prospect, to work with the governor on his tax plan.
Following Bevin’s speech, Senate President Robert Stivers, R-Manchester, and Hoover said Bevin wasn’t necessarily calling for a tax increase, because he didn’t define what revenue neutral means.
“How do you define, exactly, more revenue? Is it a particular increase in taxes or is it expanding the base by doing different things?” Hoover said.
Democratic lawmakers said Thursday they think it means an increase in taxes.
“Any way you cut it, whether you raise the rate or you take away the (tax) exemption, it’s a tax increase,” said Rep. Rick Rand, D-Bedford. “That’s the way I heard it.”
Some Democrats have traditionally supported tax increases as a way to bring more revenue into the state, but House Minority Leader Rocky Adkins, D-Sandy Hook, said he remains wary.
“If his idea is about shifting from corporate to the middle class, hard working Kentuckians, shifting that burden to them, then I don’t know that you’ll see a lot of support from this caucus,” Adkins said.
Rand, the former chairman of the House budget committee, said tax reform is one of the hardest votes a legislator can make.
“It’s going to be very difficult in a special session because usually these things have to be out, you have to be able to talk to the groups who are going to lose,” Rand said. “Because there’s always winners and losers, these tax things always generate winners and losers.”
Democrats also expressed frustration with a lack of communication with Bevin, noting that he might need their votes to pass a tax reform bill.
“This is a relationship business and the governor’s really not built any relationship with any of us standing up here,” Rand said. “He hasn’t reached out on anything. Either he doesn’t need us or he has another way he thinks he can pass a bill like that.”