Politics & Government

Gov. Matt Bevin to study possibility of tax reform

Republican Gov. Matt Bevin delivers his budget before a joint legislative session in the House Chambers at the Kentucky State Capitol, Tuesday, Jan. 26, 2016, in Frankfort, Ky. Bevin’s first budget won't take effect until July 1, but the new governor is not waiting to slash government spending.
Republican Gov. Matt Bevin delivers his budget before a joint legislative session in the House Chambers at the Kentucky State Capitol, Tuesday, Jan. 26, 2016, in Frankfort, Ky. Bevin’s first budget won't take effect until July 1, but the new governor is not waiting to slash government spending. Associated Press

Gov. Matt Bevin and his top policy officials will study the possibility of reforming Kentucky’s tax code after this year’s legislative session, state budget director John Chilton said Thursday.

“He has said it needs to happen,” Chilton said. “All different things will be considered.”

Chilton said he attended nearly all the meetings of Gov. Steve Beshear’s Blue Ribbon Tax Commission, which presented a plan in 2012 that members said would modernize Kentucky’s antiquated tax code and eventually produce at least $690 million a year.

Legislators did not act on the plan, but in light of growing financial troubles for Kentucky’s public pension plans and the budget cuts being proposed to help deal with the problem, a new group has emerged to advocate for tax reform. The Kentucky Together Coalition is made up of a variety of education, economic, health and advocacy groups, including the Kentucky Center for Economic Policy, the Kentucky Education Association and Kentuckians for the Commonwealth.

“Currently, Kentucky loses more in tax breaks and loopholes than it receives in revenue, leaving money on the table that would otherwise go toward education, health and other vital investments in our people and our state,” the group said in its first news release. “Cleaning up our tax code of these breaks will generate new revenue to move Kentucky forward.”

Kentucky Together spokesman Kenny Colston pointed out that the members of Beshear’s tax panel represented a wide variety of job sectors and political persuasions.

“We’re happy to hear Gov. Bevin is considering a plan for tax reform,” Colston said Thursday. “We hope that means revenue-raising reform that allows investments in vital public services like education and health. The Blue Ribbon plan includes a number of good ideas that impact tax breaks and loopholes so we can have more resources to move the commonwealth forward.”

Notably missing from prior efforts to reform the tax codes have been university presidents or higher education representatives, a group facing big cuts under Bevin’s proposed budget. Colston said the group was reaching out to higher education officials.

Robert King, president of the Council on Postsecondary Education, said that, historically, university presidents have wanted to see a tax reform plan that includes dedicated revenue for higher education before getting involved.

“They’ve been very reticent to get into the discussion if it’s just more money to get into the state,” he said.

Rep. Jim Wayne, D-Louisville, who is preparing to file his perennial tax reform bill, said university presidents have been “sitting on the bench,” despite representing huge constituencies affected by yearly tuition increases over the past decade.

“They grumble and gripe, but they don’t do anything to get into the trenches to get this project moving,” he said. “They’ve had 35 percent cut, and they’re shoving all those expenses off on the students and their families, and that’s nothing but a tax increase. If they were true leaders, they would come to the legislature to insist that they raise more revenue.”

Wayne said he was “minimally” encouraged by Chilton’s remarks.

“We need leadership on this, we need someone who will be bold and have a clear vision for Kentucky,” he said.

Linda Blackford: 859-231-1359, @lbblackford

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