The revenue bill which contains some new money to fund the House version of Kentucky’s next two-year state budget passed Thursday with a 68-25 vote, moving the biggest item of the 2018 legislative session forward in the legislative process. The bill that will fund most state agencies also passed the House with a 76-15 vote.
The House-passed bills contain funding for many areas of state government including education, public pensions, and others for the next two years, and adopt many of the recommendations of Gov. Matt Bevin but also incorporate some new revenue measures including an increase in the cigarette tax and a tax on opioids in order to restore cuts previously proposed in the Governor’s budget.
House Appropriations and Revenue Chair Steven Rudy said he will introduce a real tax reform package next week that would bring more comprehensive reforms to the state’s tax code. Until then, he said, the smaller revenue measures in the budget bill will help legislators fill the funding holes that currently exist.
The House version of the budget package includes a provision to make Kentucky the first state to adopt a 25-cent per dose tax on opioids that would be placed on the manufacturer and would be collected in a similar manner to how the state collects the wholesale gasoline, cigarette, and other taxes, according to Rudy.
An increase in the cigarette tax by 50-cents a pack would produce $128 million in the first year and $110 million in the second year.
The bill also includes more than $3 billion for funding of Kentucky’s pension systems and the highest level of per-pupil funding for the state’s K-12 education system that the state has seen up to this point. Learn more about the budgets here.
All of the budget bills passed through the House Thursday, including the budget bill, funding measure for the two-year budget, the judicial budget, and the legislative budget, all now move to the state Senate where the members of that body will be able to craft their own version of these budgets before the bills come back to the House for concurrence or further edits.