Kentucky Senate Republican leaders say they don’t expect to make significant tax policy changes during the 2023 session that’s just weeks away from starting.
While lawmakers will vote on reducing the personal income tax to 4.5%, Senate President Robert Stivers, R-Manchester, said he doesn’t expect the General Assembly to make any changes to the sales tax during the 30-day session that starts in January.
The vote to reduce the income tax from 5% though will be a priority, Senate Appropriations and Revenue Committee Chairman Chris McDaniel, R-Ryland Heights, said. Lawmakers can do that because they passed House Bill 8 last year. It sets up parameters to reduce the flat income tax by .5% if the state’s general fund meets certain levels. That first threshold happened earlier this year.
The goal behind House Bill 8 is to eventually do away with the income tax and move Kentucky to a more consumption-based economy. HB8 expanded what was covered in the sales tax but did not impact the 6% rate.
During a press conference in Covington with other Senate GOP leaders and Republican senators from Northern Kentucky, Stivers said they need to see how the economy reacts to reforms that have been passed in recent years. Uncertainties about inflation and interest rates also are factors.
“This is not the year to do it,” he said. “You don’t plant the seed and get an immediate result. You plant it, and it takes time.”
Under legislative rules, any tax-related bill passed in the 30-day odd-year session would need 60% approval. With Republicans holding 31 of the 38 Senate seats and 80 of the 100 House seats, that voting requirement is not expected to be an issue.
Abortion is also expected to be an issue as voters last month rejected a constitutional amendment that would have declared no individual right to the procedure.
The state has a trigger law restricting access to an abortion enacted after the U.S. Supreme Court’s Dobbs vs. Jackson Women’s Health Organization decision that struck down Roe v. Wade. That trigger law is one of two laws Kentucky pro-choice organizations are seeking to have overturned in the courts.
When asked if lawmakers would consider amending the law to include exceptions for rape and incest, Stivers said the GOP caucus has not had a chance to meet and discuss that possibility.
Written by Steve Bittenbender. Cross-posted from Center Square.