Less than three weeks after he boldly promised Kentucky lawmakers would consider comprehensive tax reform during the 2018 legislative session, House budget committee Chairman Steve Rudy admitted Tuesday he had “failed.”
Rudy, R-Paducah, told the committee he hadn’t had time to craft a tax overhaul plan for them and likely wouldn’t in coming days. Tuesday was the 53rd day of Kentucky’s 60-workday legislative session. He made the acknowledgment after the committee discussed but did not vote on House Bill 609, a proposal to raise the state’s gas tax by 10 cents per gallon — from 26 cents to 36 cents.
He said after the hearing that HB 609 probably would not be voted on this year, but added the cautionary note that “it could be attached to another bill in these last days.”
“I think most legislators agree that any tax increase for the Road Fund should be in a total tax reform package for the state,” said Rudy.
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His remarks were much different on Feb. 28, as he unveiled the House Republican state budget plan, which relied on a proposal to raise $500 million by taxing cigarettes and opioid drugs.
“I am absolutely committed to comprehensive tax reform, in the 2018 regular session of the General Assembly,” Rudy said at the time.
Those tax proposals were just a “stopgap,” Rudy explained on the House floor the following day. “As I committed last night in committee and I commit again today on this floor, this is just to get the ball rolling to get it down to the Senate.”
On Tuesday, Senate Republicans unveiled their own state budget proposal, and it includes no new taxes.
Tax reform is complex but is needed, Rudy said Tuesday. He quickly added that nothing is dead in a legislative session until it officially ends.
Unlike Rudy, the co-sponsors of HB 609 — Reps. Sal Santoro, R-Florence, and John Sims Jr, D-Flemingsburg — said they remain hopeful their bill will be approved this session.
The bill is a product of a work group the House formed last year to look at funding for state transportation needs.
Santoro and Sims told the panel that the state has a backlog of more than $1 billion in resurfacing projects and about 1,000 bridges that need to be repaired and replaced.
And in two years, they said, $700 million in federal money for local public transportation systems will be be at risk unless Kentucky can find an extra $100 million a year to meet funding requirements.
Raising the gas tax by 10 cents would generate an extra $300 million a year for road projects.
Santoro said that since 2013, 26 states and the District of Columbia have raised gas taxes, according to the National Conference of State Legislatures. Last year, seven states did so, including Indiana, West Virginia and Tennessee.
The measure also would impose a $100 registration fee for people who own hybrid vehicles and plug-in hybrid vehicles. They now pay nothing.
Other fees would increase, too. The cost of attending state traffic school would increase from $15 to $50 and registering a vehicle with the county clerk would jump from $11.50 to $22.
Several committee members applauded Santoro’s and Sims’ work and echoed their sentiments that the state needs more money.
Rep. Jim Wayne, D-Louisville, said legislators need “to go to the people” to sell the idea of tax reform.