Kentucky tax reform and new revenues are a wild card for State of the Commonwealth

This from the Courier-Journal:

Hopes for a bipartisan start to the 2014 General Assembly hit another snag Monday as Republican Senate leaders made it their priority to challenge Gov. Steve Beshear’s regularity powers in the wake of his efforts to enact Obamacare.

Just one week after Democratic leaders of the state House signaled that a minimum wage increase would be their biggest priority for the session that starts Tuesday, Senate President Robert Stivers said Monday that Senate Bill 1 will be a constitutional amendment to allow the legislature to immediately overturn any regulation established by a governor, if the legislature deems it does not conform with state law.

The proposal for expanded legislative authority comes a month after a legislative committee — driven by its Republican members — tried to strike down state regulations related to Democratic Gov. Steve Beshear’s decision to implement the federal health care reform.

“Currently, the legislature has no impact on the viability of the regulation because the governor can unilaterally decide” to implement it, Stivers said in a news release.

House Speaker Greg Stumbo, D-Prestonsburg, said last week that he can support more oversight of the executive branch, but stopped short of embracing Stivers’ proposal. “There may be some way forward on that,” Stumbo said.

Stivers, R-Manchester, said other priorities for the Senate will be: Establishing a limit on state debt of 6 percent of general fund revenues, eliminating the “super-sizing” of legislative pensions when a legislator takes a job in the executive or judicial branches, a bill to fight heroin abuse, and an “informed consent” bill requiring women considering abortion to have a face-to-face meeting with the doctor who would perform the abortion.

Those priorities, notably, do not include tax reform — a topic that Beshear is expected to discuss in his State of the Commonwealth address Tuesday night.

Beshear — giving a sobering description of the state’s budget outlook — said in his annual address last year that it was vital that he and the General Assembly agree on a tax reform plan that would increase state revenues in 2013. But while the state’s budget outlook has only gotten tighter, tax reform remains unfinished business.

“We haven’t heard much from the governor on the issue since early last year, except that he mentioned in interviews last month that he still wants to address tax reform,” said Jason Bailey, director of the Kentucky Center for Economic Policy, a Berea-based policy group. “So I’m hoping the governor will lay out the bleak budget situation again and make the case to build public support for tax reform and more revenue.”

Beshear will deliver his seventh State of the Commonwealth address —to be televised live by KET — at 7 p.m.

He has recently repeated his budget warnings, saying that all new revenue expected in 2014-16 is committed to paying for things like public pension reform and large increases required in the existing Medicaid program.
Beshear said in his speech last year that to generate additional revenue money needed to restore past cuts and move the state forward, legislators must “modernize our out-dated tax code.”

The themes he delivers in his speech Tuesday will be fleshed out later in the month when the governor delivers his budget address to the same audience.

“I’m going to talk about a lot of the progress that we’ve made, not just in the last year but in the last six years. We have come a long way, even through the worst recession of our lifetime, but we still have a ways to go,” Beshear told reporters at a news conference Monday. “We’ve got several core challenges that we need to continue to tackle and overcome.”

The governor stressed in the interviews with reporters two weeks ago a point he’s likely to make Tuesday night: That his proposed budget will include at least some restoration of funding cuts to education, regardless of the fate of tax reform. He did not say how much.

“If we are going to be able to reinvest in education at all, it will require some cuts in other areas. I am determined to reinvest in education with this upcoming budget,” he said in the interviews.

House Minority Leader Jeff Hoover, R-Jamestown, said, “I don’t know what the governor plans to talk about, but whatever he says I hope he will say he wants to work in a bipartisan manner like we did last year on pension reform.”