Two important bills passed out of their respective committees this week:
HB 12 would cap the consumer co-pay on insulin prescriptions at $100 per month. The bill would bring much-needed financial relief to the many Kentuckians living with diabetes, and would set a precedent for Kentucky to adopt similar consumer protection legislation in the future. I was very happy to vote yes on this bill as it passed successfully out of the House Health and Family Services Committee this week.
HB 136, a bill to legalize medical marijuana in Kentucky, passed out of the Judiciary Committee this week with only one no vote.
Both of these bills mark significant forward progress for Kentucky! Both now move on for a full vote in the House, where I will enthusiastically cast my yes votes.
Keep an eye on HB 1, a problematic and exorbitantly expensive bill that would put the health of our most vulnerable Kentuckians at increased risk. Among other concerns, HB 1 would put into law the onerous Medicaid work requirements that were pushed by the Bevin administration. These provisions were struck down in federal court just this week.
Focus on Revenue: HB 416 I am the primary sponsor of this bill, filed earlier this week along with 19 co-sponsors. HB 416 would raise much-needed revenue and create a fair tax structure. Our current system benefits wealthy individuals and special interests, and requires middle and lower income Kentuckians to shoulder a disproportionate share of the overall tax burden. Currently, the middle 20% of Kentucky earners pay 11.1% of their family income in state taxes; the top 1% of Kentucky earners pay just 6.7% of their family income to the state. (Source: KY Center for Economic Policy)
In this budget session, we are seeing numerous bills with significant associated costs pass out of both the House and Senate, yet there has been no serious discussion about how we will pay for them. Early analysis on HB 416 from the Institute on Taxation and Economic Policy estimates that the changes provided in the bill would generate just under one billion dollars. $1,000,000,000. Imagine the public investment – in education, healthcare access, good jobs, public infrastructure, secure retirement – and shared prosperity those funds would allow.
- Relies primarily on amending the individual income tax – making it less upside down by asking more of those who have more, while reducing taxes for those who have less. Proposal includes graduated rates of 5%, 6% and 7%, a phase out of the use of itemized deductions at higher income levels, an increased standard deduction, and raising the floor to allow to allow more low-income Kentuckians to qualify for the family size tax credit.
- Increases the pension exclusion back to $41,110, then phases the exclusion out dollar for dollar so that people with lower incomes benefit, while removing the exclusion for the wealthy.
- Repeals corporate loopholes and restores some safeguards that prevent multistate corporations from shifting revenues to avoid taxes.
- Expands the sales tax base to additional luxury services, while removing the sales tax on small animal veterinary care. (In the current system, we pay taxes on healthcare for our family pets, while veterinary care for horses is exempted.)
- Increases the cigarette tax an additional $0.50, and increases the tax on other tobacco products, including vaping products, proportionately. (In addition to making good financial sense, this is also good health policy aimed at reducing the use of tobacco products.)
- Proposes taxing “instant racing” slot machines at a level commensurate with slot machines in other states and with live racing, and removes other inequities in taxing at tracks with all new revenues going to the General Fund.
Jason Bailey of the Kentucky Center for Economic Policy published a detailed analysis of HB 416 this week.
I also had an opportunity to sit down with Renee Shaw for a discussion of HB 416. Our conversation aired on the February 14th broadcast of KET’s Legislative Update. You can find the segment here.
Thanks to all of you for your emails, phone calls, and visits to Frankfort. It’s always good to hear from you!