Stivers: House revenue bill faces tough prospects in Senate
FRANKFORT, Ky. (AP) — A House-passed revenue proposal that features a tax on prescription opioids and a higher cigarette tax faces tough prospects in the Senate, the chamber’s top leader said Friday.
“If you’re asking in the form that it’s in, I think it will be very difficult,” Senate President Robert Stivers said of the narrowly targeted revenue plan that cleared the House on Thursday.
However, some components of the House proposal could potentially end up in a broader plan to revamp Kentucky’s tax code, Stivers told reporters. It’s possible lawmakers will take up a comprehensive tax overhaul in the final weeks of this year’s legislative session, he said.
Under the House proposal, Kentucky could become the first state in the country to tax the addictive prescription painkillers that have spurred a wave of addiction across the country.
Stivers, a Republican from Manchester, said it’s possible that lawmakers could still try to tackle broader tax reform this session, adding that “it depends on timing.”
The session, which lasts 60 working days, is slightly more than two-thirds complete.
The revenue measure passed by the House would tax each dose of opioids 25 cents. State officials say it would generate about $70 million per year. The bill also calls for a 50-cent tax hike on cigarettes and would take away a small income-tax credit.
The revenue would go to help fill a budget gap caused by the state’s struggling pension system. The plan’s supporters want the revenue to support schools, as well as some state programs targeted for cuts by Republican Gov. Matt Bevin.
Stivers said that education is a priority for the Senate as well.
But he questioned the reliance on a higher cigarette tax to help meet the state’s financial obligations. As smoking rates decline, so will the revenue generated.
“You’re going to try to predicate a budget on a shrinking base when you’re going to have recurring expenditures that won’t shrink,” Stivers said. “That’s not good taxing policy.”
Proponents of an increased cigarette tax point to its effect on smoking rates as a virtue, noting the state pays huge amounts to treat smoking-related illnesses.
The Republican-run legislature has considerable work to do, topped by finishing a new two-year state budget. The House passed its spending plan Thursday, sending the bill to the Senate, which will put its touches on it. Their differences will be worked out in a conference committee.
Lawmakers have another massive undertaking before them: a bill to revamp one of the country’s worst-funded public pension systems. The bill had its initial hearing earlier in the week when a Senate committee reviewed it. Retired public school teachers turned out in droves to oppose the measure, which would reduce their annual cost-of-living increases.
Republican lawmakers said they hope to take up the measure again next week, if they get actuarial reviews back in time. The bill’s proponents say it will put the pension systems on solid financial ground for current and future retirees.