The Richmond Register

State News

January 7, 2014

Beshear talks tax reform, help for education

Governor also wants vote on expanded gambling

FRANKFORT — Kentucky’s progress in education “is in jeopardy with every dollar we cut out of education,” Gov. Steve Beshear told state lawmakers Tuesday night in his State of the Commonwealth address.

So he wants to reform the state tax code and offer voters a chance to vote on a constitutional amendment to allow expanded gambling. But if lawmakers won’t go along, Beshear said, he will recommend painful cuts to other areas of government in order to reinvest in education.

He was talking to 138 lawmakers who’ve shown little inclination to raise new revenues as they, along with the governor, have cut $1.6 billion from the state budget over the past six years.

During that time, the state’s primary source for funding public schools – called SEEK – has been frozen at 2009 levels while enrollment grew. Other areas of education such as teacher development, after-school services and money for textbooks have been cut back severely.

Sen. Walter Blevins, D-Morehead, commended Beshear for pointing out the need to restore cuts to programs hit hard during the past six years, especially education. He said he is optimistic the two parties and chambers can work together to do some of the things Beshear called for.

Republican Senate President Robert Stivers, R-Manchester, has said the state doesn’t “have a revenue problem, it has a spending problem” and problems can’t be solved “just by throwing money at them.”

But he seemed willing at least to listen after the governor’s speech. Stivers said he appreciated the governor’s tone and that all lawmakers want to support education, but he said the question now becomes how.

“We very much have an interest in a competitive tax code,” Stivers said, but again said he was interested in seeing the details of Beshear’s proposals.

Democratic House Speaker Greg Stumbo said Beshear “struck a good balance of reasonableness and some achievable goals,” including education funding.

Of course, all the debates about revenues and where to spend what the state has over the next two years will play out in an election year. Republicans, who already control the state Senate, have their eyes on taking over the House as well which Democrats now control 54-46.

Beshear said he will send lawmakers “this session a tax modernization proposal with specific recommendations.” But he provided no specifics Tuesday night.

House Minority Leader Jeff Hoover, R-Jamestown, wanted more details on what Beshear will propose on tax reform but at least “now we can have the debate.” On the other hand, Hoover said Beshear neglected to mention Kentucky has the sixth highest unemployment rate in the country but “at least he’s talking about jobs.”

Beshear said he understands there are arguments for and against expanded gambling – a measure which has repeatedly failed to pass the General Assembly.

“But there’s no reason to deny the people of Kentucky an opportunity to vote ‘up’ or ‘down’ on this issue, “Beshear said. “They want to vote on this issue, and we should let them decide whether to continue to allow Kentucky tax money to flow across our borders or to keep it here at home.”

Most polling has consistently shown that a majority of Kentucky voters – including some who oppose expanded gambling – want the chance to vote on the issue.

Beshear laid out some other goals. He said he will work with Republican Congressman Harold “Hal” Rogers for a way to invest in high-speed broadband access for eastern Kentucky.

“And I am also looking to find a way to finish ‘four-laning’ the Mountain Parkway,” Beshear said. Both of those were topics which arose at a regional summit in Pikeville last month looking for ways to boost the depressed coal economy of the region.

Beshear said he will support a statewide smoking ban with the goal of reducing the state’s smoking rate by 10 percent by 2018. He said he’s on board with lawmakers who want to address the state’s growing heroin problem, a problem many in law enforcement see as a response by addicts to the state’s previous crackdown on prescription pain medications. He will support offering domestic violence protection to unmarried dating couples and he wants to strengthen Kentucky’s requirements for child booster seats.

He drew applause with his claim Kentucky has announced 217 projects representing more than 12,000 “projected new jobs.” He cited the state’s ranking as one of the top three automobile manufacturing states and said the state has created new businesses at a rate of “four times the national average.”

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

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