Ky. House votes to balance budget, create jobs, and lower taxes on military pay

June 24, 2009

Frankfort – Classroom funding will be protected, Kentucky companies will have further incentive to expand, our men and women in uniform will get much-deserved tax relief, and large bridge projects will now be able to move forward under legislation strongly supported today in the state House of Representatives.

            “This short special session has a long list of accomplishments, and every Kentuckian will benefit,” said House Speaker Greg Stumbo, D-Prestonsburg.  “It will move the state forward in numerous ways, and speed up our recovery during these trying economic times.  I am proud of the leadership the House has shown, and of the way both the House and Senate came together in difficult times.”

            The bills sent to Governor Steve Beshear today for his signature will do such things as:

 

*          Overcome the billion-dollar shortfall for the upcoming fiscal year.  “This largely follows the governor’s plan, which shields classroom funding, our universities and critical health programs like Medicaid from cuts.  We also made sure, though, that state employees will not have to forfeit any holiday pay as had been proposed,” said House Majority Floor Leader Rocky Adkins, D-Sandy Hook.

 

*          Recognize the sacrifice of those serving in the military by exempting their active-duty military pay from the state income tax.  “The House made this a priority this legislative session, because our military families deserve it for all they have done for us,” said House Majority Caucus Chairman Bob Damron, D-Nicholasville.  “Kentucky now will be an even more inviting place for them to live, especially those who may have considered other states.”  This exemption complements one already in place for pay earned in a combat zone, and it will apply to those serving in the National Guard and the Reserves.

 

*          Establish a funding mechanism for road projects costing at least $500 million.  “This is landmark legislation that ensures these projects will be built in a timely manner while protecting our Road Fund,” said House Speaker Pro Tem Larry Clark, D-Louisville.  “The proposed Louisville bridges would have been severely hampered if we did not pass this, and other large projects like I-69 in Western Kentucky would have also been held up.”  Under the legislation, Kentucky will create a new authority that, with state and local input, will issue the bonds for “mega” projects and then serve as the conduit to pay them off.

 

*          Implement a new vehicle trade-in tax credit.  “The vast majority of states, including every one surrounding us but Virginia, allow people to count the value of their trade-in when it comes time to pay taxes on the new vehicle they are buying,” said House Majority Whip John Will Stacy, D-West Liberty.  “This one measure alone should spur auto sales in Kentucky, and since we are the third-largest producer of vehicles in the nation, this will help not just car-buying families but also those who work in our auto assembly and parts factories as well.”

 

*          Create Kentucky’s economic stimulus plan.  “This far-ranging package does such things as provide incentives to Kentucky-based companies to re-tool and re-train in order to stay competitive and not have to leave Kentucky to realize these benefits,” said state Rep. Tommy Thompson, D-Philpot, who sponsored this legislation in the House.  “This law will also help us bring a NASCAR Sprint Cup race to the Kentucky Speedway and bring the Breeders’ Cup to Churchill Downs.  Additionally, it will make Kentucky more attractive to the film and television industry, and it will clear the way for us to compete for a next-generation battery plant in Hardin County that would put Kentucky at the forefront of an industry that could single-handedly reduce our independence on foreign oil.”

                  Rep. Thompson also noted the bill includes a boost to the housing industry, by giving current homeowners a strong incentive over the next year to buy a new home.  “First-time home buyers already receive substantial credits from the federal government, so this would complement that program for homeowners thinking about moving,” he said.  “This incentive should help our home construction industry clear out inventory and get people back to work.”

                  In addition, Speaker Pro Tem Clark noted the legislation gives the Jefferson Community and Technical College the authority to use its own money to buy property that is next to its downtown Louisville campus.

                  The University of Kentucky, meanwhile, would have authorization to continue expanding its hospital and to allow private funding for renovating Commonwealth Stadium and to construct a new baseball stadium.

 

            “By all indications, 2009 will forever be seen as a watershed year for Kentucky, based on what the legislature was able to do during the past two weeks and in the legislative session earlier this year,” House Speaker Stumbo said.  “These laws will move the state forward in ways that did not even seem possible just six months ago.  The end result is stronger schools and universities; proper care for our neediest citizens; well-deserved benefits for our soldiers, small businesses and new-car buyers; and a way forward to make our highway system the envy of the nation.  There are still plenty of challenges ahead, certainly for our signature horse industry, but if we can continue working together, I am confident even better days are ahead.”

 

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