Beshear signs tax bill after Senate approval

This from Tom Loftus at C-J:

FRANKFORT, Ky. — Gov. Steve Beshear this afternoon signed into law tax-increase legislation that is a key part of the effort to eliminate the state’s $456 million revenue shortfall.

House Bill 144, given final legislative approval earlier in the day by the Senate, raises the state’s 30-cent-per-pack cigarette tax to 60 cents; also doubles taxes on other tobacco products; and applies the 6 percent sales tax to the retail sale of alcoholic beverages. The sales tax already applies to by-the-drink alcohol sales.

The tax increases take effect April 1.

The vote this morning in the Senate was 24-12, with 23 votes required for passage in the 38-member body.Twelve Republicans and 12 Democrats voted for it. One Democrat, Joey Pendleton of Hopkinsville, didn’t vote, citing a conflict.And Democrat Mike Reynolds, whose election to the Senate in a special election on Tuesday was certified by the State Board of Elections just this morning, was absent.

Senate President David Williams, R-Burkesville, said after all senators had voted that this week’s bipartisan approval of the emergency revenue measure sent a message that “Kentuckians have come together, Republicans and Democrats, House and Senate and the executive branch.” ...

This from the Governor:

Beshear, legislative leadership sign budget legislation

Cooperation, bipartisanship cited

in passage of package that will protect education,

health care, public safety

FRANKFORT, Ky. (Feb. 13, 2009)– Hailing a spirit of bipartisanship and Gov. Steve Beshear today signed a budget package that he said protects funding for basic education, health care and public safety.

“We believe we can’t move Kentucky forward tomorrow if we slide backward today in areas like education, public safety and health care,” said Gov. Beshear, flanked by Senate President David L. Williams and House Speaker Greg Stumbo. “I want to applaud and thank my colleagues – President Williams, Speaker Stumbo, Sen. Ed Worley and Rep. Jeff Hoover – for their leadership and commitment to this state.

“We don’t agree on everything. But we share certain values and priorities … With compromise from all parties we have been able to put together a package that solves this immediate problem while preserving our ability to react to future challenges.”

“By the passage of these two bills, we have faced the immediate problem and now we must turn to the hard work of the long term challenge,” Senate President Williams said.

“Today is an important step forward for Kentucky, and not just because of these bills being signed into law. The partnership that made this legislation possible is a firm foundation for taking on the problems we still face in the months and years ahead. I look forward to building on these efforts to see what more we can do for the commonwealth,” said House Speaker Stumbo.

In November 2008, a team of independent economists projected that the commonwealth would have a $456 million budget shortfall in this fiscal year. In December, Gov. Beshear put forward a proposal that combined additional spending cuts with modest revenue measures to close the shortfall.

The package approved today by the Kentucky Senate, and earlier this week by the House, includes some $150 million in additional spending cuts combined with a 30 cent increase in the cigarette tax and applies the state’s 6 percent sales tax to store sales of beer, wine and liquor.

Under the package, the basic education funding formula would be preserved from any cuts, while higher education would only be cut 2 percent. Medicaid funding also would be preserved from further cuts as would significant areas of public safety. Most other state agencies would be cut 4 percent. The downturn in the economy resulted in over $430 million in cuts in the state budget last year.

Gov. Beshear acknowledged that the budget package adopted today is not perfect and he also said that he will need to work in the near future with legislative leaders on an approach to next year’s budget, which will likely involve an even larger shortfall. Yet, the governor said that the level of cooperation between the executive and legislative branches should be a model for future discussions and negotiations going forward.

“We have not worried about credit or political points. We have not let the idea of what’s perfect be the enemy of what’s necessary,” Gov. Beshear said. “We have, simply put, practiced the politics of what’s possible.”

“We know today’s action – as significant as it is and as important as it is for our children – is but a temporary solution,” the governor said. “But I’m convinced that if we maintain the level of commitment and the spirit of cooperation that we’ve demonstrated in recent weeks, next year’s mountain – no matter how steep – will be overcome.”

SOURCE: Gov's press release

Beshear calls for KERA & Early Childhood Task Forces

Beshear urges shared unity,

purpose to resolve budget crisis

FRANKFORT, Ky. – In the wake of massive, statewide recovery efforts from the devastation of last week’s winter storm, Governor Steve Beshear [Wednesday] called for unity and a sense of shared purpose in tackling the state’s $456 million budget shortfall in his second State of the Commonwealth address.

To combat that shortfall, Gov. Beshear urged support for a plan that includes a significant increase in the tax on tobacco products as well as another $150 million in additional spending cuts. The governor pointed out that Kentucky’s tax on cigarettes is currently the fourth lowest in the nation, while the state also ranks first in the number of smoking related deaths each year, which adds hundreds of millions of dollars in health-care costs.

“There comes a point—if we slash too deep and without regard to the devastating impacts of those reductions—when we jeopardize state government’s ability to expand our intellect and capacity to reach out to the needy,” said Gov. Beshear. “This is why my proposal, even while cutting spending further, clearly articulates priorities for investment.”

Since taking office, Beshear has already reduced spending by more than $430 million dollars, shrinking the state workforce by 2,000 employees and using cost-effectiveness and efficiency efforts to reduce day-to-day spending within the Executive Branch.

Additionally, the Governor introduced several initiatives ... including:

Education: bringing together leaders from both the public and private sector, along with key legislators, to review the Kentucky Education Reform Act. The governor also announced his intention to announce a task force on early childhood education next week.

...“We cannot control the global economy, we cannot choose the economic conditions in which we serve, but we can define the manner in which we lead,” said Gov. Beshear. “We can’t pick the moment, but we can help to shape and define it. Our state motto says it succinctly: ‘United we stand, divided we fall.’”

SOURCE: Governor's press release

Beshear's rift with GOP Senate could imperil revenue plan

This from Ryan Alessi at H-L:

Gov. Steve Beshear said Thursday he will move forward with plans to generate more state revenue, but those efforts would have to clear a solidly Republican state Senate with whom Beshear has an increasingly frigid relationship.

Atop Beshear's list of options to erase a projected $300 million budget shortfall is a potential increase in the state's 30-cent-a-pack tax on cigarettes. Beshear has suggested a special legislative session to address that or other measures, but any firm plan will come after Thanksgiving when key revenue projections have been released.

"At that point, I need to put together a proposed plan, and then I want to take that plan out to the people of this state to get some feedback. I want to discuss it with legislators to get their feedback," he said Thursday. "So realistically, we're looking at after Christmas or after the first of the year to be in a position to take any kind of
official action."

But Republican Senate President David Williams has repeatedly balked at the idea of raising any taxes, including on cigarettes.

Emboldening his stance are the results of Tuesday's election, in which Republicans turned back Beshear and the Democrats' bids to take over three GOP-controlled Senate seats...

...Williams said, he's not convinced that the state's financial problems are dire enough to require tax increases...