Farmer leaves tax reform group, says Democrats want tax increases

State News

January 27, 2010

By RONNIE ELLIS The McCreary County Record Wed Jan 27, 2010, 03:44 PM EST

FRANKFORT — The bi-partisan effort to study tax reform in the state House of Representatives hit a roadblock Monday when Rep. Bill Farmer, R-Lexington, one of the key players in the debate announced he's pulling out.

Farmer said Democrats want a plant that is a "broad base tax increase under the guise of tax reform."ù He said the size of an earned income tax credit proposed by Democrats, led by Rep. Jim Wayne, D-Louisville, represents "a redistribution of wealth."ù

Wayne said that's not true - nor has any plan been finalized which incorporates Farmer's objections.

"There's no proposal yet,"ù Wayne said when told Farmer might be thinking of pulling his support for an effort to "blend"ù his and Wayne's separate bills on tax reform. Both men referred to estimates of state revenues depending on several different changes in the tax code, but Wayne said those data are "only a starting point using (Wayne's) House Bill 13 and Bill Farmer's bill."

Farmer and Wayne have each proposed changes to the tax system but they take different philosophical approaches. Farmer would eliminate corporate and individual income taxes and extend the sales tax at a lower rate to services. He says the change would aid job creation.

Wayne's proposal is to apply the sales tax to some "luxury services,"ù shift some of the tax burden to the more wealthy while incorporating an earned income tax credit for the working poor and giving the middle class a tax break. He says his measure is fairer because currently the lowest income groups pay a higher percentage of earnings than the wealthy.

House Speaker Greg Stumbo, D-Prestonsburg, asked the two to work with former budget chair and expert on state budgets, Rep. Harry Moberly, D-Richmond, and others to "blend"ù the two proposals and bring a compromise to House leaders. That's the group Farmer said Monday he's leaving.

On Monday, Farmer said his "recommendations were abandoned and the tax reform plan I proposed was morphed into a full frontal tax increase."

Stumbo said Farmer's plan contained a miscalculation by legislative staff but Farmer said he knew of the miscalculation and had accounted for that, but his intent he said had always been to produce a revenue-neutral plan and the Democrats' plans would produce significantly more revenue.

But Wayne - even before Stumbo asked him and Farmer to collaborate - always listed as one of his goals to produce a more "reliable"ù revenue stream for a budget which currently faces as much as a $1.4 billion shortfall over the next two years. Without new revenue, Stumbo said Monday, the state would have to impose "draconian"ù cuts in the next budget.

Taxes are a touch subject for incumbent legislators in an election year and all 100 House members will be on this year's ballot. Monday afternoon, Farmer learned he'd have a Republican opponent in the May primary - Jacob Hartlage of Lexington. So far, no Democrat has filed. But Farmer told Kentucky Public Radio late Wednesday afternoon that had nothing to do with his decision to pull out of the working group.

Farmer said the Democratic plan would have reduced income taxes by less than 1 percent and by placing the sales tax on some services and eliminating some sales tax exemptions raise $850 million. Wayne said there is no Democratic final plan and the $850 million cited by Farmer is simply one of several results of different tax changes on a spreadsheet to show the group how each would affect the state budget.

Farmer also objected to the cost of the earned income tax credit proposed by Wayne $93 million in FY 2012, calling it a "redistribution of wealth."ù But Wayne said the proposal grants the credit up to 15 percent the federal credit and said that is based on the median of such credits in other states that offer it.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

Text Only

State News

Shepherd brings legislature to stop
FRANKFORT — Franklin Circuit Judge Phillip Shepherd not only put on hold the filing deadline for candidates for state House and Senate districts — he effectively shut down the business of the General Assembly.

February 3, 2012
Jensen still pushing for pseudoephedrine legislation
FRANKFORT – Debate on legislation to require prescriptions for cold remedies containing pseudoephedrine has been heated and it appears it may heat up some more, given remarks in the Kentucky State Senate on Friday.

February 3, 2012
Special election Feb. 7 for Comer's seat
The Feb. 7 special election to fill the unexpired term of former Rep. James Comer, who was elected Commissioner of Agriculture in November, will be conducted according to the previous district lines as they existed before the General Assembly

January 26, 2012
Confusion reigns
Angry lawmakers who saw their legislative districts changed or taken away from them continued to discuss the possibility of legal action while the newly enacted law seems to call into question a special election to fill the unexpired term of new Agriculture

January 25, 2012
VIDEO - Floor speech by Rep. Jill York on House Bill 1-January 12, 2012
Redistricting is a big issue right now going on in Carter and surrounding counties.

Jill York, current Representative of the 96th District spoke about the redistricting on Thursday.

Click the headline for video and audio

January 14, 2012
Changes afoot on congressional map
FRANKFORT — A new congressional district map approved Thursday by a Democratic-controlled House committee would substantially alter five of the state’s districts and make the First and Fifth Districts more receptive to Democrats.

January 11, 2012 1 Photo
Education coalition speaks its mind in Frankfort
FRANKFORT — Public perception may be that the state’s elementary and secondary schools haven’t faced real funding cuts in recent years, but a coalition of education groups said Wednesday that is wrong and schools need more money.

January 5, 2012
Longtime political figure dies
FRANKFORT — One of Kentucky’s most colorful political figures, Gatewood Galbraith, a perennial candidate for statewide office, has died.
Galbraith, 64, apparently died in his sleep and his body was discovered by a family member

January 5, 2012 1 Photo
Williams to remain Senate President
FRANKFORT — All the speculation was apparently misplaced. David Williams, the Burkesville Republican who lost the 2011 governor’s race to incumbent Democrat Steve Beshear, will remain president of the Kentucky State Senate at least for another year.

December 21, 2011 1 Photo
Beshear talks gambling at inaugural festivities
FRANKFORT Gov. Steve Beshear used his inaugural speech Tuesday to call for “allowing the people of Kentucky to vote on expanded gaming within our borders” and also said it is time for some sort of tax reform.

December 14, 2011 2 Photos
More State News Headlines

State News

Search Results

Farmer leaves tax reform group, says Democrats want tax increases

Site Map

Contact Us