FRANKFORT, KY. (AP) – Some people will have to pay more under a proposal to overhaul Kentucky’s tax code, a move the state’s Republican governor said is necessary to rescue it from a crushing multibillion dollar pension debt.
“I’ll take the heat for it. You all can blame me, if you like. But this will not be a tax neutral plan,” Bevin said during his annual State of the Commonwealth address Wednesday night. “We can’t afford for it to be. That’s a straight-up fact.”
Lawmakers have debated changing how Kentucky taxes its residents and businesses for years, most recently after the Great Recession forced the state to slash spending by more than $1.6 billion. But all previous efforts, including a highly publicized blue ribbon commission, failed.
Meanwhile, the state’s public pension systems have spiraled deeper into debt, with Bevin estimating it could cost the state as much as $80 billion over the next 30 years.
But now Kentucky has a Republican governor and GOP super majorities in both chambers of the state legislature. Bevin said Republican lawmakers are working “behind the scenes” with people in “private business” to come up with a plan.
Bevin offered no details during his speech, other than to say it would target the state’s long list of tax exemptions — a list so long that Bevin says the state now exempts more money than it collects every year. He referred to those exemptions as “sacred cows” and said they all need to be brought “out of the barn.”
“Some of those sacred cows will be returned to the barn as sacred cows, and some of them will be turned into hamburger,” he said. “I’m going to need your help to make it happen.”
Senate Republican Floor Leader Damon Thayer said he is “not for or against anything,” but said the tax code needs to bring in more money by creating more jobs.
“I believe the House and the Senate will play a role in developing that plan,” he said.
Bevin, who did not read from a prepared text, used most of his speech to remind people what the legislature has already done, including banning abortions after 20 weeks of pregnancy and outlawing mandatory labor union dues. But he also outlined an ambitious agenda for the remainder of the legislative session, including an emphasis on education.
He said Kentucky is going to change the way colleges and universities are funded to reward them for producing more graduates in engineering and manufacturing fields. That will mean fewer degrees featuring “interpretive this and interdisciplinary that,” Bevin said, because “this is not where the jobs of the 21st century are.”
Bevin said charter schools are coming to Kentucky, which is one of seven states that do not allow them. Charter schools are public schools governed by a contract between the school and the entity that commissioned it. How those schools would be created and who would hold them accountable have yet to be determined.
“We need not to be one of seven states in America that still has a monopoly on public education dollars,” he said.
Some Democrats oppose Bevin’s charter school plans, saying it would take money and resources away from Kentucky’s traditional public schools.
“I believe that our public schools and our teachers are being challenged every day,” House Minority Leader Rocky Adkins said.
Others were disappointed with what Bevin did not talk about. The Courier-Journal reported Wednesday that the Traditionalist Worker Party, a neo-Nazi group, is advertising on Facebook that it is holding a workshop at the Jenny Wiley State Park in Floyd County, along with a rally in nearby Pike County in an effort to recruit members.
The group’s announcement noted that the Appalachian region is largely “European,” voted overwhelmingly for Donald Trump and has suffered economically under the collapse of coal industry. It says that because the venue is a public park, “they cannot shut down the event.”
Some Democrats, including Senate Minority Leader Ray Jones called on Bevin to condemn the group during his speech. But Bevin did not mention the group or its event.
Bevin also did not discuss his personal property taxes, which WDRB-TV reported are more than a month past due. The Jefferson County Sheriff’s Office says Bevin owes more than $11,000 for the 2016 tax year.