Saturday’s legislative update hosted by the Paducah Area Chamber of Commerce was particularly timely, in relation to budget matters under consideration during the Kentucky Legislature’s 2022 session.

The event, part of the chamber’s Public Policy Series, featured remarks by area legislators District 2 State Sen. Danny Carroll, District 3 State Rep. Randy Bridges and District 6 State Rep. Chris Freeland.

Two tax-related measures, Senate Bill 194 and House Bill 8, were referenced during the approximately one-hour session held at The Commerce Center.

The Senate on Monday passed SB 194, a move that would tap into the state’s revenue surpluses to give more than $1 billion in income tax rebates to taxpayers.

In discussing the matter Saturday, before the Monday Senate vote, Carroll did not argue against the rebate but in answering a question about the state’s troubled pension system, suggested that taking the $1 billion and “investing in the future” could help shore up the pension system for future generations.

“It’s not that I don’t support that (a rebate), but I always think about what is the worst thing that could possibly happen,” he said. “I think we owe it to that next generation that decisions have got to be made to take care of them. We’ve done enough damage to our kids’ future.”

At that point, Carroll had not heard details of the House’s tax plans regarding the budget.

“I’m sure there will be a discussion when the budget gets to conference committee,” he said.

The House introduced HB 8 last Friday, which would gradually reduce Kentucky’s individual income tax — with the long-term goal of eliminating the levy. It would also extend the state sales tax to a host of services.

The measure was returned to the House Appropriations and Revenue Committee — of which Bridges is a member — on Monday.

Acknowledging the House bill had just “dropped” the day before Saturday’s session, Bridges offered highlights of the measure.

“HB 8 will lower the state’s income taxes from 5% to 4% in 2023. That’s leaving an estimated $1 billion in taxpayers’ pockets to spend in local communities,” Bridges said.

“It is a conservative tax modernization effort, but with the forecasts and everything, we’re confident that that’s going to remain stable.”

According to Bridges, some of the state’s current reserves will be used for the first 1% lowering.

“But with the way all of our forecasts are trending, we’ll be able to keep that up so there’s a ratcheting mechanism and as our economy grows and our income grows and it meets certain criteria, it will ratchet down a half%, 1%, and the goal is to get to zero% personal income tax.”

The thresholds, commonly referred to as triggers, “are based primarily on organic increases in state revenue, together with an expansion of base items (that’s been exempt) subject to sales tax,” he said.

“Now, you’re going to hear we’re not raising the sales tax rate. What we’re doing is expanding the base. Tennessee does this and has a 9.25% sales tax rate. Ours is at 6% and our goal is to keep it at that and not increase that rate.”

The Associated Press contributed to this story.

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