, Corbin, KY

State News

March 26, 2014

Senate passes budget with no locked-in gas tax hikes

CORBIN — By Ronnie Ellis / CNHI News Service

The state Senate on Tuesday passed its version of a two-year revenue measure, and unlike the House version, it does not lock in gas tax increases.

The Democratically-controlled House promptly refused to go along and the two chambers will appoint a conference committee to work out a compromise.

There was also some discussion that the Republican-controlled Senate improperly attached the measure to a non-appropriations bill, but it wasn’t clear by the end of the day if they might have to re-work the bill sponsored by budget chairman Sen. Bob Leeper, I-Paducah.

Either way, the substance of the bill won’t change, and unlike the House, the Senate version doesn’t lock in higher gas taxes to help fund the road plan.

Kentucky’s gas tax fluctuates with wholesale prices. The per-gallon tax is scheduled to drop on April 1 because wholesale prices have been falling. The House wants to lock in the rate at December levels, which would keep the tax at 30.8 cents. The difference is about $107 million over the two-year biennium for the Road Fund.

“There is not a feeling our side that we needed to change the gas tax,” Leeper said. “Obviously, if you don’t raise the gas tax, you’ve going to affect the road plan.” The Senate has yet to release its version of the road plan.

Democrats in the House said it was more important to keep that $107 million for road construction, repair and maintenance, and pointed out that about 40 percent of it goes back to county governments to maintain county and secondary roads.

The Senate also removed language contained in the House measure designed to protect about 79 public libraries which were formed by petition and whose taxing authority is the subject of multiple lawsuits.

Kentucky has 106 library districts, 79 of which were created by petition under a law that said they must go back to voters any time they wish to increase tax rates. But lawmakers passed a bill in 1979 that limits taxing entities to a 4 percent increase in tax revenues (not rates) each year. If they want to raise more than 104 percent of what they received the previous year, local governments, school boards and taxing entities must submit that to voters.

After that, libraries argued they were subject to HB 44 provisions rather than the petition law and for years have raised tax rates under that law. But taxpayer groups in Kenton and Campbell counties sued, arguing the tax rates should be rolled back to 1978 levels and two lower court rulings have agreed. The libraries have appealed, saying they will be financially devastated if they have to return to 1978 funding levels.

The House revenue plan would include language codifying libraries’ interpretation of the laws. Leeper said the Senate didn’t want to interfere with the issue while it is in the courts, though he said it’s likely the legislature will have to address the issue of library funding down the road.

The Senate retains but alters a House provision on applying a pari-mutuel tax to instant racing which is now offered at horse tracks in Franklin and Henderson but which is the subject of on-going litigation.

Both bills retroactively apply the tax to September 2011 when the two tracks began offering the games but the Senate would tax those proceeds and those in the future at 1.5 percent. The House would tax proceeds from September to enactment of the bill at 1.5 percent and 3.5 percent going forward. The difference is about $1.1 million for the biennium.

Text Only
State News
  • Grimes comes out firing on McConnell

    Alison Lundergan Grimes, Kentucky’s Democratic Secretary of State who is challenging Republican U.S. Sen. Mitch McConnell in this fall’s elections, went after the five-term incumbent in a speech here to a convention of local county officials.

    July 11, 2014

  • Conway, Comer address judge-execs

    It might have been a preview of next year’s Kentucky governor’s election — but county officials here for a convention probably didn’t expect one likely candidate to endorse a potential opponent.

    July 11, 2014

  • McConnell, Grimes parade cases

    Mitch McConnell and Alison Lundergan Grimes know a good place to look for votes when they see it.

    July 7, 2014

  • McConnell, Grimes disagree on contraception case

    Kentucky’s Republican congressman praised Monday’s U.S. Supreme Court ruling that corporations may opt out of a requirement to provide employees contraceptive coverage through insurance plans.

    July 1, 2014

  • Beshear sings praises of Affordable Care Act

    Kentucky Gov. Steve Beshear told a Washington conference Tuesday that Kentucky’s embrace of the Affordable Care Act has been “life-changing” for thousands of Kentucky enrollees and “transformative” for Kentucky.

    June 18, 2014

  • Kentucky actually fares well under new EPA regs

    Kentucky politicians and the coal industry howled about the latest installment of greenhouse gas emission regulations issued last week by the federal Environmental Protection Agency.

    June 16, 2014

  • New EPA C02 regs examined

    Given their complexity and potential impact in coal-dependent states like Kentucky, there’s considerable confusion about new carbon emission regulations issued by the Environmental Protection Agency.

    June 16, 2014

  • State budget officials predict ‘significant shortfall’

    With only 20 days left in the 2014 fiscal year, state budget officials announced Tuesday Kentucky faces an “inevitable” and “significant” revenue shortfall in both the General and Road Funds.

    June 11, 2014

  • Grimes ad blasts Obama for coal policies

    Mitch McConnell is no longer the only U.S. Senate candidate running against Democratic President Barack Obama.

    June 5, 2014

  • Legislative leaders blast carbon regs

    President Barack Obama’s efforts to rein in carbon emissions, blamed by science for changes in the climate, continues to draw harsh criticism from both political parties in Kentucky.

    June 5, 2014