For Immediate Release
February 23, 2000
Contact: Rusty Cheuvront or Mark Pfeiffer (502) 564-2611
Frankfort, Ky. – Stating that he didn’t run for governor to preside over a state that was content to stay at the bottom, Governor Paul Patton today announced several adjustments to his revenue recovery plan that he says will be a progressive step in moving Kentucky Forward.
“These
changes in our original proposal are a reflection of our understanding of the opinions of
a lot of Kentuckians and a realization of the real compromises, which must be reached if
we are to get any meaningful action out of the legislative process, the governor said.
“These actions are not all I think are necessary to move Kentucky forward but they
are all I think we can reasonably expect to be achieved during this session. This will be progress. There will be more time to address the unmet needs
of Kentucky in the next four years.”
Patton
is recommending to the General Assembly that most of the changes he proposed in his
original Revenue Recovery Plan be put into abeyance and that a task force of decision
makers be created to study the subject in depth for action at a later time.
Three
of the proposed changes should be enacted, the governor said. The major change Patton wants to keep is the
substantial revision in the tax on communication services.
“By
exchanging a hodgepodge of state and local taxes and fees with a 7% excise tax on these
services we can generate the revenue necessary to meet the most pressing needs of our
people during the next two years and replace a cumbersome, inefficient, stagnant source of
revenue for state and local governments with an efficient, easily administered, growing
source of revenue for the future,” Patton said.
A
second proposal the governor recommends keeping would require limited liability
corporations to pay the same corporate license tax as regular corporations to slow down
the accelerating loss of revenue to the state because of the rapidly increasing rate of
conversion to this new type corporation.
The
governor also recommends enacting the proposal to compute the growth of real property for
the purpose of state property tax the same growth for local property is computed to allow
the revenue to grow more in line with the growing needs of Kentuckians.
The
revised revenue recovery plan will generate $57.3 million in the first year of the next
biennium and $120.7 million in the second year of the next biennium but will leave the
governor’s proposed budget $85.9 million short of the amount was originally expected
in the first year and $23.8 million short in the second year.
“It
will be a struggle to accommodate these reductions and we are beginning a review of the
budget to find places these cuts can be made. Over the next month or so we will negotiate
with both houses of the General Assembly and hopefully end up with a progressive budget
which will move Kentucky forward as far as our General Fund expenditures are concerned,”
the governor said.
On
the road fund and a proposed 7-cents a gallon increase in the motor fuel tax, Governor
Patton said, “As accurate and justified as our proposed Six-Year Highway Plan and the
needed revenue measures we recommended are, the unusually high price of gasoline has made
it politically impossible to pass our proposal at this time. I do not retreat one inch from my assertion that
the increase I proposed is necessary if we are to build the roads the legislature has
already voted to build but I do accept reality and I am prepared to revisit this subject
when the economic and political situation is more favorable.”
Governor
Patton concluded his statement saying, “These changes in our original proposal are a
reflection of our understanding of the opinions of a lot of Kentuckians and a realization
of the real compromises, which must be reached if we are to get any meaningful action out
of the legislative process.”
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