Politics & Government

Beshear to unveil tax-overhaul plan on Tuesday

FRANKFORT — Gov. Steve Beshear plans Tuesday to publicly release his long-awaited tax-overhaul plan, which will draw heavily from the work of a tax-reform commission that met throughout 2012.

Beshear briefed legislative leaders about his proposal Monday but asked them to keep it confidential until an 11 a.m. news conference Tuesday in the Capitol.

House Speaker Greg Stumbo, D-Prestonsburg, and Senate President Robert Stivers, R-Manchester, said they would oblige the governor's request.

The Democratic governor said there remains "more than enough" time during this year's legislative session to make changes to Kentucky's tax code. Tuesday will mark the 20th day of the 60-day session, which runs through mid-April.

He noted that last year the legislature approved a complex plan to overhaul the state's main pension system in three weeks.

Beshear declined to give specifics, but said his tax plan would include "wide-ranging ideas," pulled mostly from the 54 recommendations contained in a report submitted by the reform commission Beshear created in February 2012. It was headed by Lt. Gov. Jerry Abramson.

"No one should be surprised when the proposal is put forward," Beshear said.

Unless taxes are raised or spending is slashed further, Kentucky is on track to face a $1 billion annual deficit by the year 2020, University of Kentucky economists warned the tax-reform commission.

Taken as a whole, the commission's proposals would have added $659 million annually to the $9.5 billion General Fund. However, Beshear told an audience of Lexington business people Friday that his proposal would not be about creating more money for state government.

"This is about making us more competitive," he said.

Beshear hinted last week that his proposal would involve changing how the bourbon industry is taxed, altering rates on corporate and income taxes, and expanding the sales tax to include more services.

Legislative passage of any proposal that is viewed as a tax increase will be difficult this year, when all 100 House seats and half of the Senate's 38 seats are up for election.

After meeting with Beshear and other Democratic legislative leaders in the Governor's Mansion on Monday, Stumbo said the governor deserves the chance to present his plan.

"It's a difficult issue, as we all know," he said. "There's still enough time to gauge its support."

House Democrats probably will caucus Wednesday to discuss the governor's plan, Stumbo said.

Another way Beshear is urging lawmakers to raise revenue for a tight two-year state budget is expanded gambling.

Stumbo said Beshear and Senate Majority Caucus Chairman Dan Seum, R-Louisville, met Monday to talk "about the prospects of moving the Senate bill on expanded gambling.

"It's my impression that he's going to try to move that bill this week."

Seum has a bill calling for a constitutional amendment that would allow the expansion, but he said a vote was not expected this week. Instead, he is trying this week to get the Senate Republican caucus to discuss the issue.

In a sign of distrust on the gambling issue, Stumbo has said the Republican-led Senate should consider the issue first, but Stivers and Senate Majority Leader Damon Thayer, R-Georgetown, insist that the Democratic-led House should vote first.

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