FRANKFORT, Ky. — Kentucky residents are about to get a tax cut, according to the majority floor leader of the Kentucky Senate.
“We came to an agreement on that with the house last week,” said Sen. Damon Thayer, R-Georgetown. “The bill is in the process of being printed now and I think we will deal with it either Tuesday or Wednesday.”
The Kentucky General Assembly’s 2022 session is scheduled to end Wednesday, with a tax cut among the issues yet to be decided. Both houses passed tax cuts with differing approaches.
The Kentucky Senate approved a $1 billion rebate for taxpayers, with a one-time reimbursement of up to $500 per person. House Bill 8 called for a reduction in Kentucky’s income tax rate from 5% to 4% starting Jan. 1, 2023, with additional rate reductions to zero if the state meets revenue goals in future years.
Thayer and Rep. Steven Rudy, R-Paducah, serve on the 2022 Budget Conference Committee. Both said a compromise proposal appears to have the necessary votes for passage. Neither would reveal details.
“I think we’ll be able to budget to our needs still and put money back into to the pockets of Kentucky residents,” Rudy said.
“It’ll all become clear in the next day or two,” Thayer added. “Let’s just say we’re getting to be more and more like Indiana when it comes to their tax code.
Indiana’s income tax rate is 3.23%.
“We’re not quite where they are yet but we’re getting closer when it comes to how low our personal income tax will be,” Thayer said. “And we’ve got a path towards getting our tax lower than Indiana over the next couple of years.”
Apart from tax cuts, the Kentucky house and senate have yet to resolve differences on sports betting, medicinal marijuana and charter schools. Of those three, Thayer said the House-passed bill to provide a permanent funding source for charter schools is most likely to pass.
“I’ve long been a proponent and I look forward to voting for the bill,” Thayer said. “I think we’ve got a strong chance to pass it this week.”
Thayer gives medicinal marijuana no chance of passing, while sports gambling has a slim chance.
“There still is a lot of religious-based opposition to adding another form of gambling,” Thayer said. “Certainly, with the Senate president (Sen. Robert Stivers, R-Manchester) coming out a week or so ago with fairly tepid comments and not supporting sports betting, it’s hard for those of us who are supporters to overcome that.”