By Ronnie Ellis
CNHI News Service
Greg Stumbo says there is no “groundswell” among lawmakers to take up tax reform in the 2013, and he wants to take care of redistricting during the 30-day session which begins in two weeks.
The Democratic Speaker of the House held forth for reporters Friday, saying he thinks the legislature should identify a “dedicated funding source” with which to make annual contributions to the state pension system and that some “adjustments” need to be made in the so-called “pill mill” law passed last year.
Lawmakers return to town Jan. 8 but will spend the first four days selecting leadership officers and organizing committee assignments. They will then recess until Feb. 1, leaving them only 26 days in the so-called “short session” in a nonbudget year.
But they face an array of complicated and controversial issues:
• Redrawing state legislative maps
• Whether to act on recommendations of a task force to stabilize the state’s woefully underfunded state pension system
• Recommendations from a Blue Ribbon Commission on tax reform
• A proposal to require increased accountability for special taxing districts
• The ever-present issue of expanded gambling.
The General Assembly with a new leadership team in the Republican-controlled Senate and a possible change in key House leadership offices.
The pension task force recommended coming up with an additional $327 million in the next budget cycle to begin fully funding the pension systems ― but it recommended no source of funding in an era of budget cuts.
“I expect there will be some legislation which will address it,” Stumbo said when asked about a pension system fix. “I would hope we could find a funding source we can agree on with our counterparts in the Senate.”
Stumbo doesn’t agree with a suggestion from new Republican Senate Majority Leader Damon Thayer, who co-chaired the task force, that lawmakers put off until the 2014 session finding ways to cover the annually required contribution or ARC.
“The quicker we can find a source of funding and the quicker the money starts to flow into the pension system then obviously the more relief it’ll start providing,” Stumbo said. He would like to find a “dedicated funding source” to keep future General Assemblies from tampering with the ARC.
He said that might come from a reduction in taxing exemption from retirement income or a cigarette tax. Reducing the exemption from $40,000 was a recommendation of both the pension and tax reform groups.
The tax commission also recommended:
• Reducing corporate income taxes
• Reducing the top rate of individual tax rates
• Increasing the cigarette tax
• Extending the sales tax to some unspecified services
• Adding a 1-percent gross utility tax
• Increasing the earned income tax credit for low-income earners.
But Stumbo isn’t enthusiastic about taking up tax reform, always a politically dicey issue for lawmakers who have to run for re-election every two or four years.
“I don’t see any real groundswell for support at this time for any major initiative on tax reform,” Stumbo said. “I don’t hear anything from the Senate that is positive.”
Incoming Senate President Robert Stivers has told reporters he doesn’t think the state has a revenue problem ― “I think we have a spending problem.”
Stumbo said the scope and nature of the issue will require study of the recommendations by lawmakers and he thinks any action on taxes is more likely in a special session or in the 2014 General Assembly. Because it is a nonbudget session, any tax measure constitutionally requires a super majority of 60 votes in the House and 23 in the Senate for adoption.
Stumbo said he expects Beshear will seek public support and “lobby rather heavily” for some form of tax reform. He said the public is more likely to accept changes to the tax code which includes some increases if the additional money is dedicated to specific programs or needs.
He said redistricting needs to be “done fairly and it needs to done and get it over with.” He said waiting until next year doesn’t reduce the political pressure on incumbent lawmakers. The majority parties of both chambers last year redrew districts friendly to their incumbents but the courts ruled the plan unconstitutional.
Stumbo said he also sees no groundswell of support for expanded gambling but believes Beshear is working on a proposal and has asked lawmakers to withhold judgment. He said he doubts the measure’s prospects have improved all that much in the Republican Senate where it has died in the past, even with the departure of former Senate President David Williams who opposed expanded gambling.
He wants some “adjustments” to the pill mill law to reduce burdens for legitimate prescribers and users of the drugs but he said data from the first six months of the law’s implementation shows it is working.
The Speaker expects the legislature to enact some sort of reform of special taxing districts and has offered to sponsor such legislation and designate it as House Bill 1. State Auditor Adam Edelen released a report this fall that said the system lacks accountability and oversight.
Stumbo has asked the liquor industry to offer a proposal which is in accord with a federal court ruling that state law cannot permit some classes of businesses, such as drug stores, to sell wine and distilled spirits while banning those sales in grocery stores.
“I believe what the judge said was there has to be uniform law, that everybody in this class is covered by it,” Stumbo said. So far, he said, he hasn’t seen such a proposal.
He also said he doesn’t think potential challenges to House Speaker Pro-tem Larry Clark, Majority Whip Tommy Thompson and Caucus Chairman Bob Damron will disrupt legislation or sour working relationships. Rep. Arnold Simpson, Rep. Johnny Bell and Rep. Sannie Overly are considering races for those respective offices.
Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at firstname.lastname@example.org. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.