Sunday, February 15, 2009
Legislative Update From W. Keith Hall
he Kentucky House of Representatives and Senate took the first significant step in addressing the state’s budget crisis by passing House Bill 144 this week. The House passed the bill by a vote of 66-34.
For the past several weeks House and Senate leaders have met to work out details of the budget, conferring with Gov. Beshear and administration officials on a consistent basis. Our revenue plan meets the governor’s revenue request by raising more than $300 million over the next biennium.
HB 144, a revenue measure that is estimated to produce $52 million in 2008/09, will raise $158.8 million in the next full budget year from new tobacco /alcohol user fees.
The tobacco fee portion of HB 144 will increase the tax on a pack of cigarettes by 30 cents and people now purchasing liquor or beer at a package or retail outlet will pay a 6 per cent sales tax. We are already charged that 6 percent when we purchase a glass of wine or beer in a restaurant or bar, and we pay that same 6 percent when we pay for soda at a retail location. We will now be paying it at the retail level for beer and other alcoholic products.
Other provisions that will help plug the holes in the state budget were included in House Bill 143 which the House passed in a 77-23 vote.
Perhaps most important, HB 143 bill protects education, Medicaid, human services, corrections, parks and mental health and mental retardation services. It holds harmless the SEEK formula, and postsecondary schools are limited to just 2 percent cuts, as opposed to the more than 6% cuts education officials were told to prepare for.
In addition, the plan keeps more drastic cuts from being made. Even though $147 million will still be cut under this plan, House Bill 144 limits the extent of these cuts.
The bill preserves coal counties’ share of coal severance and tobacco settlement revenue, keeping the funds where they are intended to be used.
House Bill 144 prevents state government lay-offs and furloughs, maintaining a state workforce already at its lowest level in nearly 20 years.
We will also take $294 million from the state’s Rainy Day fund and other funds, with the intention of returning it next year.
While these measures will help staunch the bleeding of our state budget, there will still be pain in our commonwealth as the governor makes tough decisions about where to cut agency budgets.
We acknowledge that the passage of House Bill 144 is not a perfect solution, but is instead a first step in the search for long term answers to Kentucky’s budget problems.
But the alternative – to raise no revenue and allow for further drastic cuts which would endanger our seniors and Medicaid programs, hurt our students and educational institutions and imperil our safety by slashing public safety budgets – were not viable solutions we could consider.
There is no question that more can be done, and we are committed to pursuing other avenues, especially addressing Kentucky’s antiquated tax code which desperately needs overhauling.. House leaders have promised to begin that tax reform effort at the end of this short session.
I am very proud that House leaders worked in a bipartisan manner with the Senate and governor to pass House Bill 144. I am hopeful that this same spirit of cooperation and collaboration will continue to guide us as we complete the weeks of the 2009 session and search for solutions to Kentucky’s problems.
For the past several weeks House and Senate leaders have met to work out details of the budget, conferring with Gov. Beshear and administration officials on a consistent basis. Our revenue plan meets the governor’s revenue request by raising more than $300 million over the next biennium.
HB 144, a revenue measure that is estimated to produce $52 million in 2008/09, will raise $158.8 million in the next full budget year from new tobacco /alcohol user fees.
The tobacco fee portion of HB 144 will increase the tax on a pack of cigarettes by 30 cents and people now purchasing liquor or beer at a package or retail outlet will pay a 6 per cent sales tax. We are already charged that 6 percent when we purchase a glass of wine or beer in a restaurant or bar, and we pay that same 6 percent when we pay for soda at a retail location. We will now be paying it at the retail level for beer and other alcoholic products.
Other provisions that will help plug the holes in the state budget were included in House Bill 143 which the House passed in a 77-23 vote.
Perhaps most important, HB 143 bill protects education, Medicaid, human services, corrections, parks and mental health and mental retardation services. It holds harmless the SEEK formula, and postsecondary schools are limited to just 2 percent cuts, as opposed to the more than 6% cuts education officials were told to prepare for.
In addition, the plan keeps more drastic cuts from being made. Even though $147 million will still be cut under this plan, House Bill 144 limits the extent of these cuts.
The bill preserves coal counties’ share of coal severance and tobacco settlement revenue, keeping the funds where they are intended to be used.
House Bill 144 prevents state government lay-offs and furloughs, maintaining a state workforce already at its lowest level in nearly 20 years.
We will also take $294 million from the state’s Rainy Day fund and other funds, with the intention of returning it next year.
While these measures will help staunch the bleeding of our state budget, there will still be pain in our commonwealth as the governor makes tough decisions about where to cut agency budgets.
We acknowledge that the passage of House Bill 144 is not a perfect solution, but is instead a first step in the search for long term answers to Kentucky’s budget problems.
But the alternative – to raise no revenue and allow for further drastic cuts which would endanger our seniors and Medicaid programs, hurt our students and educational institutions and imperil our safety by slashing public safety budgets – were not viable solutions we could consider.
There is no question that more can be done, and we are committed to pursuing other avenues, especially addressing Kentucky’s antiquated tax code which desperately needs overhauling.. House leaders have promised to begin that tax reform effort at the end of this short session.
I am very proud that House leaders worked in a bipartisan manner with the Senate and governor to pass House Bill 144. I am hopeful that this same spirit of cooperation and collaboration will continue to guide us as we complete the weeks of the 2009 session and search for solutions to Kentucky’s problems.
# posted by Joe Kinzer @ 10:06 AM 
