Gov. Matt Bevin did the right thing by vetoing tax exemptions passed by the General Assembly this session.
To paraphrase his veto messages, we just can’t go on this way.
Some tax exemptions are worthy and appropriate but we are way past that point. Kentucky now exempts more in taxes than it collects. This exemption bonanza, combined with an outdated tax code that does not adequately capture revenue from growth in a modern economy, has landed us in deep trouble. Chronic revenue woes have shortchanged education at all levels, infrastructure investment and a host of other legitimate and essential state government services.
Everyone knows this — a report is published each biennium enumerating the exemptions — but, pushed by lobbyists and special interest groups, exemptions just keep coming, and many never end.
The answer, as Bevin said in his veto messages, is comprehensive tax reform, a thorough review of our tax structure that considers exemptions as carefully as spending, creating a code that’s modern, broad-based and fair.
The need for a tax overhaul also is not news, as our pages and a host of tax reform plans can attest. But Bevin has added an important note of urgency by cutting off the exemption spigot. Good for him. The legislature should let the vetoes stand.