Kentucky General Assembly passes tax plan and budget

Published: Apr. 3, 2018 at 5:19 AM CDT
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10:45 p.m.

A Republican lawmaker in Kentucky has been released from the hospital.

Republican Rep. Brandon Reed was rushed to the hospital on Monday with what Republican Rep. Chris Fugate called a "serious medical condition." Monday night, House Republican Floor Leader Jonathan Shell said Reed had been released from the hospital and is doing well.

Reed, who has cerebral palsy, represents three central Kentucky counties. His absence came as lawmakers were debating a proposal to impose sales taxes on a host of services like auto repair and some home improvements. The House eventually approved the measure by a vote of 51 to 44.


7 p.m.

Kentucky lawmakers have approved a $480 million tax increase to help balance the state budget.

The Kentucky House of Representatives approved the tax plan by a vote of 51 to 44 on Monday. Nine Republicans joined the Democrats in opposing the measure.

The plan would cut income taxes on individuals and businesses while imposing new taxes on services like auto and home repairs. It would also increase the cigarette tax by 50 cents per pack.

Republican Gov. Matt Bevin has indicated he oppose the bill. But by passing the bill Monday, lawmakers preserved their right to override a veto.

Democrats opposed the bill because they said they did not have time to read it. Most Republicans argued the bill will make Kentucky's tax code competitive with other states.


4:20 p.m.

A Republican lawmaker in Kentucky who has cerebral palsy has left the Capitol in an ambulance.

A House Republican Caucus spokesman confirmed Republican Rep. Brandon Reed is on his way to the hospital. Republican Rep. Chris Fugate called it a "serious medical condition."

Reed's absence comes as lawmakers are voting on a two-year operating budget and a proposal to impose sales taxes on a host of services like auto repair and some home improvements. The measure has already passed the Republican-controlled state Senate.

Reed represents three central Kentucky counties. He was first elected in 2016, part of the election that saw Republicans win control of the state House for the first time in nearly 100 years.


This item corrects Fugate's first name.


3:45 p.m.

Republican Gov. Matt Bevin has indicated he does not support a $480 million tax increase proposed by the GOP-controlled legislature.

Bevin said he is concerned the tax proposal and an accompanying two-year operating budget do not meet basic standards of fiscal responsibility. He said lawmakers have plenty of time left to fix it before the legislature must adjourn for the year.

But if legislative leaders wait until after Monday, they would not have time to override any potential vetoes from the governor.

Republican House budget chairman Steven Rudy said he is convinced the plan will not fail "no matter what the governor says."


1:55 p.m.

The Kentucky Senate has approved a $480 million tax increase by voting to expand the state sales tax to a variety of services.

The Senate voted 20-18 to send the bill to the House of Representatives, which also plans to vote on the measure Monday.

Senate Democrats objected because they said they were shut out of the process and did not have time to read the bill. Republicans said the bill had to pass Monday to preserve their right to overturn any vetoes from Republican Gov. Matt Bevin.

The bill would impose the state's 6 percent sales tax on services including automotive repair and pet care for small animals. Kentucky residents would pay 5 percent of their taxable income to the state, down from 5.8 percent and 6 percent for most earners.


11 a.m.

Many Kentucky residents would pay less in state income taxes under a proposal moving through the state legislature.

A deal announced Monday by Republican leaders would impose a 5 percent income tax rate for Kentucky residents. It would replace the current tax structure, which has a top bracket of 6 percent and various brackets below that.

Republican Senate President Robert Stivers says most people pay 6 percent because people in the lower brackets don't make enough money to pay taxes. But Jason Bailey with the Kentucky Center for Economic Policy says some people just above the poverty line would likely pay more.

The change would result in $114 million less revenue for the state, to be offset by an expanded sales tax on some services.


10:47 a.m.

Kentucky lawmakers have reached a deal to charge sales taxes on some services as part of an overhaul of the state's tax code to generate an extra $480 million over the next two years.

Lawmakers approved the plan Monday as part of a conference committee. But the plan must still survive votes in the Republican-controlled Senate and House of Representatives later in the day.

Kentucky residents would pay a 6 percent sales tax on services including landscaping, janitorial, pet care for small animals, golf courses and country clubs, dry cleaning and fitness and recreational sports centers. They would also pay sales taxes on repair and installation services, which would include auto repairs.

Democrats say they were excluded from the process.

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