KENTUCKY (1/13/13) - We are back in legislative session in Frankfort, and it is a budget session. That means making sure our spending over the next two years matches our revenue, which means some tough budget decisions will, again, have to be made.
The problem is a slow economic recovery--a seven-year odyssey that reflects extended high unemployment, a drop in school funding levels (as attendance increases while state funding levels remain flat), and extra requests for government assistance. It has made life hard for the average Kentuckian and will make this 60 legislative-day regular session fairly difficult.
Overall, I think what Kentuckians want most out of this session is for state lawmakers to pass laws that will boost the economy, allowing the average citizen to regain financial footing. In short, they want economic development. And they will likely get it in some measure.
Several bills already filed for consideration in this session prove welawmakers want economic development, too. There's a bill that would set up a $40 million "angel investor" tax credit program to encourage capital investment in small business. There are at least two bills that would establish a back-to-school sales and use tax holiday in August for clothing and supplies, and another piece of legislation that would set up a state income tax credit for the hiring of legally blind or severely disabled persons starting in 2015.
Then, of course, there are the heavily-publicized economic development proposals we've all read about: HB 1, which would raise the state minimum wage from $7.25 to $10.10 per hour over the next two years to help Kentucky's struggling working class; proposed constitutional amendments in both the House and Senate that would let Kentucky voters decide the question of whether casino gaming should be allowable in the Commonwealth; and the issue of state tax reform.
Let me say this clearly: The likelihood of tax reform passing this session based on recommendations of the governor's 2012 Blue Ribbon Commission on Tax Reform or otherwise hinges on legislative will in the House and the Senate, and not all lawmakers in those chambers are of the same mind on the issue. Some want to see tax reform now; others say any chance for tax reform at this time is slim-especially passage of any proposal that would raise tax revenue.
That said, the governor has told lawmakers that he will present them with a "tax modernization proposal" including several provisions, not the least of which is a proposed constitutional amendment to allow local voters to consider a one-cent or less increase in the local option sales tax for specific projects. Any success it will have, like that of all bills filed this session, remains to be seen.
At least one economic development project planned for Kentucky as-of-late has raised privacy concerns among thousands our citizens: the proposed interstate natural gas liquid pipeline planned for construction through private lands across the Bluegrass region and portions of Western Kentucky. The proposal has led to the filing of two pieces of legislation in the House so far this session. While each of the bills would follow a different path to rein in a company's ability to condemn private property under the state's eminent domain law for the pipeline project, both bills and others-if considered this session-are expected to generate much interest.
The right to privacy is also behind opposition to so-called drones (or "unmanned aircraft") that were a big news item in 2013. At least one bill has been filed so far this session that would prohibit police or other law enforcement from using drones to "gather evidence or other information," with little exception, in hope of balancing the important work of law enforcement with a citizen's right to privacy. Law-abiding citizens expect to live without unwarranted intrusion, as well they should.
One issue that everyone has heard about over the past several months is the continued financial needs of the state employees' and Kentucky teachers' pension systems. Lawmakers passed legislation in 2013 to reduce the growing unfunded liability of the public pension system serving state government retirees, but additional public pension contributions are needed. The same is true for the Kentucky Teachers' Retirement System, a separate system representing the state's retired teachers that is requesting additional state funding to meet federal accounting rules set to take effect next year.
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