Williams says tax reform is budget answer

LOUISVILLE — Kentucky's leaders should focus on tax reform and downsizing government—but should not turn to gambling— to solve the current budget problem, Senate President David Williams said Wednesday.

Williams, the Republican from Burkesville, told local officials at the Kentucky Association of Counties conference at the Galt House Hotel that the governor and legislators should reform the "antiquated tax system that punishes people who produce" and doesn't consider taxing consumption, rather than than production."

"The only way we can do this is to sit down and talk in a bipartisan sort of way," he said.

Later, he said Democratic Gov. Steve Beshear should call together leaders from both parties to tackle the issue rather than trying to pass legislation to allow slot machines.

"That's what he ought to be focusing on," Williams said of tax reform. "We've got to get innovative."

The governor has said the recession makes tax reform difficult because changes to the tax code could put an additional burden on the working class.

"Now is not the time to pursue tax reform because it would raise taxes on somebody," Kerri Richardson, the governor's spokeswoman, said Wednesday.

Williams also told local elected officials that the $1 billion projected budget deficit over the next two years should be seen as an opportunity to make government more efficient.

The legislature and the governor will probably have to shrink government agencies further through attrition and some job cuts, he said.

"I think virtually every area of government is going to be reduced in many ways," Williams said later. "I don't think anything is going to be exempt."

Beshear, meanwhile, made his pitch to the same group on Tuesday for a plan to allow slot machines as a way to generate several hundred million dollars in revenue for the state while also helping the horse industry.

Williams has proposed a constitutional amendment that would require voters—not just the General Assembly—to approve any gambling measure.

"I'll trust the people to make this decision," he said.

The gambling issue has been the undercurrent for the ongoing struggle for control of the state Senate, where Republicans hold a 19-17 advantage, with one independent who caucuses with the Republicans and an open seat that will be filled in a Dec. 8 special election.

Beshear said the outcome of that election in the 14th district—which opened up when Beshear appointed Republican Sen. Dan Kelly to a judgeship—will be one factor as he decides how to proceed in pushing for a slots bill in the 2010 General Assembly. Democrats already picked up one senate seat this summer after Beshear hired GOP state Sen. Charlie Borders for a Public Service Commission position.

Williams joked with the crowd, many of whom are Democrats, that some people have suggested that Beshear has been bipartisan.

"I said, 'Well, how do you figure that?'" he said. "And they've said, 'He's offered more Republicans great jobs than anybody I've seen.'"

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