House to hold hearings on tax reform soon

This from Bluegrass Politics:

FRANKFORT — House leaders said Monday that they plan to hold hearings soon on two tax overhaul bills in preparation for a possible special legislative session this summer.

Rep. Rick Rand, D-Bedford, chairman of the House Appropriations and Revenue Committee, said Monday that hearings on two tax reform bills as well as other discussions about the condition of the state’s finances could take place as early as late April.

“The prospects for our next budget cycles are not rosy,” Rand said. “We want to make sure that we are prepared to make any decisions that we may have to make.”

The General Assembly just adjourned on Thursday. But talks of tackling tax reform — or looking at the way Kentucky generates revenue — started early in the 2009 session after the General Assembly passed a combination of cuts and increases in cigarette and alcohol taxes as a way to plug a $456 million shortfall. Many legislators, in speeches on the floor and privately, said the state could no longer balance its books on the backs of just a few industries.

And many say next year’s budget shortfall could be even greater as the state’s revenues continue to decline. Gov. Steve Beshear said last week that he has not yet decided whether to call a special session to address a potential shortfall.

The legislature has kicked around tax reform since Gov. Paul Patton’s tenure in the 1990s, but the measure gained steam when a 2002 report showed that Kentucky’s tax structure was structurally unsound–meaning it did not raise enough revenue to support the services the state had in place. The state uses a tax structure more suited to the industrial age and did not address or tax the growing service sector, the study found...

Good. And while they're at it, perhaps they can remove the inherently disequalizing property tax as the basis for funding Kentucky schools.