Things to know about Kentucky’s budget, tax plan
FRANKFORT, Ky. (AP) — Kentucky lawmakers revealed a two-year operating budget on Monday with a twist: A $480 million tax increase by expanding the sales tax to some services.
The Senate approved the package on Monday, and House lawmakers planned to vote on it later in the day. Republican Gov. Matt Bevin indicated he did not support it. But if lawmakers pass it on Monday, they will get a chance to override any potential vetoes.
WHO WILL PAY LESS?
Most Kentucky taxpayers. Right now, most people return between 5.8 percent and 6 percent of their taxable income to the state. The bill would change that to 5 percent. That would let taxpayers keep $500 million a year. But they won’t keep it, because the plan also eliminates eight tax deductions and a $10 tax credit. Taxpayers will net about $114 million over the next two years.
WHO WILL PAY MORE?
Smokers. The cigarette tax is going up by 50 cents per pack.
People who buy services. Getting your car fixed? Add a 6 percent sales tax to the bill. Other services to be taxed include landscaping, pet care for small animals, fitness and recreation centers, golf courses and country clubs, dry cleaning, overnight trailer campgrounds, bowling centers and extended warranties.
WHAT WILL THE STATE DO WITH THE EXTRA MONEY?
Balance the state budget.
Per-pupil spending will increase to $4,000 for the first time ever. About $254 million will go to school buses, money Republican Gov. Matt Bevin had recommended eliminating. More than $10 million will go to 14 school districts in danger of closing because of lost revenue from a change in the tax of unmined minerals. And there is no funding mechanism for charter schools.
More than $5.6 million to hire more prosecutors. Restores $6.2 million for the Kentucky State Police Gov. Matt Bevin had proposed to eliminate. About $1 million to purchase 800 rifles for the Kentucky State Police. Removes funding for private prisons. The Bevin administration had re-opened one prison to help ease overcrowding issues.
ADOPTION AND FOSTER CARE
More than $11 million to give social workers up to a 10 percent increase in their base salary. Nearly $5 million to support relatives who adopt children in child welfare cases.
More than $1.2 million to pay for attorneys that represent poor people in civil cases.
The Kentucky Mesonet, a network of weather monitoring stations across the state used to issue warnings for severe storms, gets $1.5 million over two years. Bevin had recommended eliminating it.
Kentucky Wired, the state’s troubled project to bring high-speed internet capability to all 120 counties, was not funded. But it does give the governor authority to continue to fund the program if the state has a surplus.