Kentucky’s GOP-led legislature opens election-year session

FRANKFORT, Ky. (AP) — Republican lawmakers in Kentucky resumed their push Tuesday to continue cutting the state’s individual income tax rate, as they convened for a 30-day session that will play out against the backdrop of the state’s premiere political contest — the race for governor.

Legislation aimed at lowering the income tax rate by another half-percentage point to 4%, effective Jan. 1, 2024, was introduced on the opening day of this year’s legislative session.

House Speaker David Osborne predicted the measure will clear the House this week. The Senate isn’t expected to take up the bill until February, when lawmakers will reconvene after an extended break that begins after this week, he said. Republicans have supermajorities in both chambers.

The tax-cutting measure is a follow-up to a law enacted last year that triggered a reduction of the individual income tax rate from 5% to 4.5% at the start of this year. The ultimate goal for GOP lawmakers is to phase out individual income taxes in Kentucky.

“We happen to believe that it’s good policy to allow taxpayers to keep more of their hard-earned money,” Osborne told reporters.

The bill’s opponents warned that revenue lost from the rate cut would squander the state’s massive revenue surpluses and that the reduction would overwhelmingly favor wealthy taxpayers.

Jason Bailey, executive director of the Kentucky Center for Economic Policy, said the proposed rate cut would “tear a major hole in future funding for schools, hospitals and other essential needs.”

Last year’s measure featured certain fiscal conditions that have to be met to trigger incremental drops in the state’s personal income tax rate. The landmark legislation also revamped the tax code by extending the state sales tax to more services. Opponents said Tuesday that it’s an overall revenue loser for the state. The extended sales taxes under last year’s bill would generate $1 in new revenue for every $12 in lost revenue from cutting the income tax rate from 5% to 4%, Bailey said.

Several other high-profile issues could resurface during this year’s session. Those issues include efforts to legalize, regulate and tax sports betting and resolve lingering questions over so-called gray machines — devices resembling slot machines that have spread in stores across the state. Lawmakers also could consider another push to fully legalize medical marijuana in Kentucky. Beshear took executive action to allow Kentuckians with certain debilitating conditions to legally possess medical marijuana, provided the cannabis is purchased legally in other states.

Important issues will surface during the session, but Kentuckians shouldn’t expect “an incredibly aggressive agenda” this year, Osborne said. Lawmakers have pursued a bold agenda since 2017, when Republicans took complete control of Kentucky’s legislature, he said.

“I do think it’s incumbent upon us to pump the brakes a little bit and tweak some things where they need to be tweaked, make some adjustments where they need to be adjusted,” the speaker said.

Republicans added to their supermajorities in last year’s election, and the House and Senate welcomed a bevy of new lawmakers Tuesday. The legislative session will continue until late March.

By then, the hotly contested Republican primary for governor will be in full gear. Democratic Gov. Andy Beshear, who has feuded with GOP lawmakers over a series of issues, is seeking a second term. The governor is scheduled to deliver his annual State of the Commonwealth speech to the legislature and a statewide television audience Wednesday evening.

Rep. Jason Nemes, a member of the House Republican leadership team, said GOP lawmakers aren’t looking to put the governor on the “hot seat” with the legislation they send to him.

“I think his responses to things that we believe are good policy will show who he is,” Nemes told reporters. “But trying to put Andy Beshear on the hot seat is not our intention at all.”

Meanwhile, it’s uncertain whether lawmakers will end up appropriating more emergency disaster relief for tornado-stricken parts of western Kentucky and parts of eastern Kentucky devastated by flooding, Osborne said. The legislature passed relief aid measures for both areas last year.

“There very well may be some circumstance that we would have to appropriate more,” Osborne said.

Shoring up the state’s troubled juvenile justice system is another looming issue, the speaker said. The governor announced a series of change s late last year that were aimed at bring security problems under control. Osborne on Tuesday described the executive action as a “temporary Band-aid,” but said lawmakers are looking to delve into the situation.