UPDATE: Kentucky lawmakers pass budget; now heads to Governor Bevin
The House has approved the budget, 59-36. The budget and revenue bills now head to the desk of Governor Bevin.
Our media partners WKYT reports, Kentucky Republican lawmakers revealed their plan for the state's two-year budget, including tax increases and other revenue measures on Monday.
Lawmakers discussed elements of House Bill 200, the budget bill, along with House Bill 366, a revenue bill, in a conference committee Monday morning. As many teachers listened to the committee discuss the bill, lawmakers highlighted several education funding strategies.
The Senate narrowly passed HB 366 with a 20-18 vote, while the budget passed with a 25-13 vote.
The budget fully funds retired teachers' health care with general funds in the first year, while excess funds will support the second year. This means no retired teachers will have an increase in premiums or a decrease in coverage.
The budget increases funding for certain programs, including the Support Education Excellence in Kentucky (SEEK) program, which allocated state funds to local school districts. The program would provide $4,000 per pupil each fiscal year.
Our media partners WKYT reports, House Minority Leader Rocky Adkins, D - Sandy Hook, expressed concerns over the model used to distribute performance-based funding to public universities. He also believes the process used leading up to the proposed budget has kept Democrats in the dark.
The Kentucky State Police will receive an additional $1 million for an increase in salaries at the crime lab, and no private prisons will be allowed without the approval of the General Assembly.
The conference committee also received an overview of House Bill 366, which also addressed a couple high-profile educational issues. Lawmakers removed any language regarding charter schools, and the Kentucky Teachers' Retirement System will not be moved to a merit-based system.
HB 366 also includes some changes to the tax system. The bill would lower individual and corporate income tax rates to a flat five percent. This would result in a net loss of $194.1 million in revenues over two years according to the committee's report.
Our media partners WKYT reports, The bill does including multiple tax increases, including a 50 cent per pack cigarette tax and a sales tax on various services. It also calls for a tax on electronic cigarettes at the same rate as other tobacco products (15 percent).
The veterinary care sales tax only involves small animals. Livestock and horses are excluded from the sales tax.
The bill also calls for the suspension of three tax incentives. Those three are the Industrial Revitalization, Investment Fund and Angel Investor tax credits.
Rep. Steven Rudy, R - Paducah, claims HB 366 will bring in $230 million in new revenue per year for the state when it factors in the revenue streams.
Kentucky lawmakers have approved a $480 million tax increase to help balance the state budget.
The Kentucky House of Representatives approved the tax plan by a vote of 51 to 44 on Monday. Nine Republicans joined the Democrats in opposing the measure.
The plan would cut income taxes on individuals and businesses while imposing new taxes on services like auto and home repairs. It would also increase the cigarette tax by 50 cents per pack.
Republican Gov. Matt Bevin has indicated he oppose the bill. But by passing the bill Monday, lawmakers preserved their right to override a veto.
Democrats opposed the bill because they said they did not have time to read it. Most Republicans argued the bill will make Kentucky's tax code competitive with other states.
A Republican lawmaker in Kentucky who has cerebral palsy has left the Capitol in an ambulance.
A House Republican Caucus spokesman confirmed Republican Rep. Brandon Reed is on his way to the hospital. Republican Rep. Jeff Fugate called it a "serious medical condition."
Reed's absence comes as lawmakers are voting on a two-year operating budget and a proposal to impose sales taxes on a host of services like auto repair and some home improvements. The measure has already passed the Republican-controlled state Senate.
Reed represents three central Kentucky counties. He was first elected in 2016, part of the election that saw Republicans win control of the state House for the first time in nearly 100 years.
The Kentucky Senate has approved a $480 million tax increase by voting to expand the state sales tax to a variety of services.
The Senate voted 20-18 to send the bill to the House of Representatives, which also plans to vote on the measure Monday.
Senate Democrats objected because they said they were shut out of the process and did not have time to read the bill. Republicans said the bill had to pass Monday to preserve their right to overturn any vetoes from Republican Gov. Matt Bevin.
The bill would impose the state's 6 percent sales tax on services including automotive repair and pet care for small animals. Kentucky residents would pay 5 percent of their taxable income to the state, down from 5.8 percent and 6 percent for most earners.
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