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2010 General Assembly - Week in Review
January 25, 2010
The pace of the session picked up a little last week with the Governor unveiling his budget plan and will continue to build into this week once the legislative candidate filing deadline passes on Tuesday. With 13 of the 60 legislative days complete, the focus will center on the House budget and tax reform efforts.
The Budget
The release of the Governor’s budget proposal was the hot topic for this week. The plan was very controversial, because it balanced the budget with new revenue that doesn’t exist unless expanded gaming legislation is passed. The Speaker of the House and President of the Senate both said they would throw out the Governor’s budget and start over with both Chambers working together on a new spending plan beginning this week.
The legislature won’t have an easy task ahead of them dealing with the $1.5 billion projected shortfall. It would appear the legislature will construct a budget that is front loaded the first year with the remaining federal stimulus funds and any one time money they may be able to identify. This would leave a second year with massive cuts across the board, but it would give the General Assembly the time to consider revenue enhancements like tax reform.
Tax Reform
Tax reform will take on a higher profile as the legislature begins to draft the budget. The Speaker has assigned Rep. Moberly, Rep. Rand, Rep. Farmer and Rep. Wayne to work on a tax reform package that will address the exemptions in the sales tax, the addition of services to the sales tax, repeal of the corporate income tax and an earned income tax credit for the working poor. The Speaker has said that aside from exemptions that help our working families like food, prescription drugs, and medical care, all exemptions should be reconsidered and their effectiveness re-examined. This is another way of saying exemptions used by business and industries will be the low hanging fruit.
Key points on tax reform:
- The House wants to protect working families from any new or expanded taxes, but the intent behind the reforms will be to close the structural imbalance in the budget and erase the billion dollar deficit.
- There will have to be a substantial increase in business taxes to make that work.
- If you haven’t begun to look at your tax situation in Kentucky, you need to begin to examine it.
Begin to review what a repeal of the corporate income tax will mean to your business compared to the addition of a sales tax on services or the repeal of any current sales tax exemptions your business may currently have.
KAM is hard at work on this issue and has activated its Tax Policy Committee to begin to analyze the effect of expanding the sales tax to include services and removing certain exemptions that are important for manufacturers. As we review these tax changes we will continue to communicate with you the effects this may have on Kentucky Manufacturers.
KAM Specific Issues:
We want your feedback!!! Please CLICK HERE to send us your thoughts on this legislation or any others that might interest you as a KAM member. Thanks for your participation.
House Bill 38, sponsored by Rep. Brent Yonts (D - Greenville), in its original form, would make permanent the 5th edition of the AMA guides for evaluating impairment for certain workplace injuries rather than allowing the most recent edition to take effect. In short, the most recent edition of the AMA guides reflects the most up to date scientific analysis of workplace injuries and KAM has steadfastly urged its adoption.
Over the past two weeks, Rep. Yonts has worked closely with KAM and other interested parties to attempt to forge a compromise bill. No compromise has been reached as of yet, but KAM will continue to be involved in the negotiations on this important issue and keep you informed of developments.Senate Bill 81 – Sponsored by Sen. Gary Tapp (R-Shelbyville) & House Bill 110 – Sponsored by Rep. Sannie Overly (D-Paris) are identical bills that are housekeeping bills brought forth by the Professional Surveyors and Engineers Board of Licensure. The bills make several technical changes to Kentucky’s licensure of surveyors and engineers. Because so many of our KAM members utilize the services of engineers we wanted to bring this bill to your attention to make sure that it didn’t adversely effect our members.
Senate Bill 26 - sponsored by Sen. Bob Leeper (I - Paducah), will remove long-standing statutory barriers to the development of nuclear power facilities in the Commonwealth. The measure was voted out of the Senate this week and now heads to the House where the measure did not pass last session. Touted as a method to keep Kentucky's energy costs down, KAM will be lobbying in support of this bill as it moves to the House.
House Bill 287 – Sponsored by Rep. Richard Henderson (D-Jeffersonville) allows an existing tax incentive agreement under the KREDA program to be extended from 15 years up to 25 years under the following circumstances: 1. An additional investment or the creation of additional jobs; 2. Consolidates operations currently located in another state to Kentucky; 3. At the time the extension is granted, the approved company has used less than sixty percent (60%) of the inducements awarded under the tax incentive agreement.
House Bill 267 – Sponsored by Rep. Tommy Thompson, would make some tweaks to the economic development incentives legislation that passed this summer during the Special Session. KAM’s initial review of this legislation has determined that this is indeed a housekeeping measure and will be looking to get feedback from our members in regards to this legislation and the impact it may have on our members.
Senate Bill 28 - This bill would define a career pathway and a career pathway program of study in career and technical education. KAM is very supportive of this legislation and will be working with Senator Westwood to move this legislation forward.
Senate Bill 56 - This is legislation emenating from the Energy & Environment Cabinet that requires the use of Regional Screening Level Table for US EPA Region 3 rather than Region 9. This legislation is a top priority for the KAM's Chemical Industry Council and they will be looking to encourage its passage.
We want your feedback!!! Please CLICK HERE to send us your thoughts on this legislation or any others that might interest you as a KAM member. Thanks for your participation.
Editor's Note: Legislative Update is an E-Newsletter for members and stakeholders in the Kentucky Association of Manufacturers (KAM). It is published periodically to communicate important information about how KAM is looking out for your interests in the Kentucky General Assembly, U.S. Congress, local governments, or through other groups and/or associations. Through KAM, you have the strongest, most-effective and experienced team of lobbyists in Kentucky. If you do not want to receive KAM Legislative Update, please let us know by return e-mail.
Senate Majority Leader Harry Reid (D-NV) recently announced that the health care bill he brings to the Senate floor will include a public option that allows states to “opt out.”
A public option in any form would disrupt and destabilize the private health care marketplace. While health care reform is essential, not just any health reform will do. Legislation that includes a public health plan that under-reimburses providers would inevitably shift costs to the private sector and fail to achieve the bipartisan goal of reducing overall health care costs. Premiums would increase because more people would be in plans that pay doctors and hospitals at lower, government rates, causing a shift in costs to private insurance payers.
It is critical that Congress enact a version of health care reform that reduces health care costs for manufacturers and does not include a public option. Contact your Senators now to express your opposition to the public option. Ninety-seven percent of NAM members already provide health benefits to their employees. A public option has the potential to seriously hurt manufacturers’ ability to continue to provide high-quality health benefit plans.
To contact your Senators, simply click here.
