Tax reform measure and next two-year state budget sent to governor’s desk

Bills containing the state’s next two-year state budget and a tax reform package moved through the legislative process on Monday, sending the measures to the governor’s desk ahead of the veto period.

BUDGETHouse Bill 200, the state budget for the next two years, contains full funding of the Kentucky Retirement System (KRS) and Kentucky Teachers’ Retirement System (KTRS) with some additional funds going into the systems.

As for education funding, K-12 funding in the SEEK formula will be increased to $4,000 per pupil appropriation, an increase in that funding. And school transportation funds are also increased under the budget. Read more about the next two-year state budget presented in the conference committee report here.

The Senate passed the budget bill with a 25-13 vote. The House passed the bill with a 59-36 vote. View the full votes from each legislative body below:

TAX REFORMThe tax reform plan presented and passed Monday represents the first major changes made to Kentucky’s tax code in many years. The changes proposed in the plan would generate $238.8 million in 2019 and 248.1 million in 2020 for the state, totaling an increase of $486.9 million over two years for Kentucky.

Personal income tax will be lowered to a flat 5% for all Kentuckians rather than the current tiered brackets which puts most citizens in a 5.8% or 6% income tax bracket.

Other changes in the plan include increasing the cigarette tax by 50 cents, sales tax applied to certain services where it has not previously been, removing many deductions for state income tax, conforming to the federal IRS codes adopted with federal tax reform, and many other areas. Read all of the details of the tax reform plan here.

The Senate passed the budget bill with a 20-18 vote. The House passed the bill with a 51-44 vote. View the full votes from each legislative body below:

Both House Bill 200 and House Bill 366 now head to the governor for signature or veto. If he chooses to veto the legislation in the coming days, the legislature would have the ability to override in the final days of the legislative session.

Continue checking The Bottom Line for more updates on these and other bills.

Categories: 2018 Kentucky General Assembly, Pensions, Taxes & Budget

Leave a Reply

%d bloggers like this: