Tuesday was a short legislative day, given the Monday holiday, but marked the first hearing of the session for House Bill 262. The hearing took place before the House Subcommittee on Gaming. Chairwoman Joni Jenkins explained that she wanted the committee to hear testimony on this revenue plan because it is important for them to understand other options the state has for raising revenue. The hearing was for information purposes only, and no vote was taken.

    The panel of testifiers included Rep. Jim Wayne, Dr. Peter Meyer (an economist at U of L and a KFTC member), Dr. Sheila Schuster (representing four large mental health and health care coalitions), and Dana Beasley Brown representing KFTC.

    In an inspired introduction, Rep. Wayne described the components of the bill and made the case for raising revenue fairly.  He was great, maintaining that the revenue from this bill means "the difference between a retirement system imploding or not, it means a double digit tuition increase…read tax increase…on college tuition or not. It means our K through 12 schools falling behind the nation or keeping pace with other states, it means a crumbling Medicaid system or adequate care for our most vulnerable. The list goes on and on.  We don’t want to imagine the nightmare that will soon become real unless we act boldly to lead our citizens the way we are called to do."

   Peter Meyer testified not only as an economist, but also as a person who'd be asked to contribute more with an estate tax and with our proposed changes to the income tax.  He said that a more progressive tax system makes good economic sense for Kentucky, and in fact said that it could be made even more progressive than the bill proposes without harming the economy.  He also said that restoring the estate tax is good public policy--the current phase out, he said, rewards the wealthiest Kentuckians for their good luck--and that, as someone who'd be paying this tax in the future, he fully supports it. 

    Sheila Schuster was terrific in telling legislators that they should raise revenue and raise it fairly. She said that she and KEA (Kentucky Education Association) are working hand in hand this session to make sure legislators don’t pit health interests against education interest as they divide up the crumbs in the budget. She described very clearly some of the ways that mental health has been harmed by under-funding (no cost-of-living increase for community mental health centers in 13 years, even while caseloads have increased 17 percent). Schuster ended her testimony with, "It's all about people, and people cannot wait.  It's really not a choice.  We need this revenue, and we need to get it in a fair and sensible and progressive way."

    Dana Beasley Brown rocked her little boy to sleep just in time to emphasize the ways in which HB 262 addresses the unfairness and regressive nature of our current tax system. She explained how families of four living just above the poverty line pay more taxes in Kentucky than in any other state, and explained how that unfairness feels to families that it most directly affects.  She was wonderful as always. 

     There were a few questions from legislators. Rep. Mike Cherry said, "If given a chance to vote on this bill, I'd vote for it....I believe in the progressive tax system."  He made it clear that he likes this better than a cigarette tax because it is progressive. 

    The testimony on HB 262 was followed by testimony from the health groups about the cigarette tax. This was followed by a statement from KFTC member Bill Stolte, who spoke as an individual. He held up the Tax Expenditure Report and said, “I believe every member of the legislature should read with the budget in one hand and the tax expenditure analysis in the other.” He pointed out the $300 million in exemptions for retired persons who don’t pay income taxes on pension income, social security income, or dividend income.

    That got a comment from Rep. Tom Burch:

I enjoyed your presentation but if you're looking for profiles in courage, you've come to the wrong place.

    It was a very good series of presentations. The media was all in the room, but today’s newspapers have nothing.