By Liam Niemeyer
Kentucky Lantern
A bill to reduce Kentucky’s income tax emerged Friday from a Senate committee, along with a caution from the budget committee chair to his fellow Republicans.
Criticizing “those who would throw caution to the wind,” Senate budget committee Chair Chris McDaniel said the Republican-controlled legislature should stick to the “very disciplined” process it has adopted for gradually reducing and ultimately eliminating Kentucky’s individual income tax.
Some Republicans want to speed up their march to eliminating the income tax; a Republican amendment to do that was ruled out of order in the House on Thursday.
McDaniel, of Ryland Heights, said, “I would encourage those sitting around this table that when those stunts are pulled, because they have been in the past and they will be in the future, encourage people to come forward with the spending cuts that are requisite to accomplish that policy. Otherwise, we will be no better than other states who have seen their efforts at serious reform resoundingly defeated by the electorate they are choosing to help.”
The Senate Appropriations and Revenue Committee voted 11-0 in favor of House Bill 1, sending it to the full Senate.
The bill, which emerged from the House with bipartisan support on Thursday, would reduce the individual income tax rate from 4% to 3.5% effective Jan. 1, 2026. It was given its second reading on the Senate floor Friday, meaning it could be passed by the full Senate and sent to Democratic Gov. Andy Beshear’s desk for approval when the legislature reconvenes Feb. 4.
When the House passed HB 1 on Thursday, Rep. Steven Doan, R-Erlanger, unsuccessfully tried to propose a floor amendment that would more swiftly cut the income tax rate in future years.
His amendment was ruled out of order by House Speaker David Osborne because it would violate the state Constitution by creating an unbalanced state budget.
Doan told the Lantern he’s filed bills in past legislative sessions to eliminate what he sees as duplicative government agencies and “force the administrative state to find efficiencies.”
“I’d be happy to sit down and have a conversation about what we can cut. I’ve just not been asked.” Doan said. “The entire Republican supermajority was built on campaigning for 0% income tax. It would be disingenuous to not deliver on those promises that we have made to our constituency.”
The Republican-controlled legislature in 2022 enacted a law that reduced the individual income tax rate by a half percentage point from 5% and established budgetary thresholds that the state would have to meet in order to make further half-percent cuts.
The thresholds are meant to ensure the state can absorb the reduction in revenue with drastic cuts to services. In 2023, the rate was cut to the current 4%. Republican leaders have expressed confidence the process will achieve the larger GOP goal of eventually eliminating the income tax, despite changing economic conditions facing the state.
This story is republished from the Kentucky Lantern by Creative Commons License. The Lantern is part of States Newsroom, the nation’s largest state-focused nonprofit news organization. Liam Neimeyer covers government and polity in Kentucky and its impacts throughout the Commonwealth for The Kentucky Lantern.
Taxes are the price of civilization, and an income tax is the fairest way to provide revenue, as it is based on one’s ability to pay. I have never in my contacts with my representatives been able to pin them down on how the state will make up for needed revenue as the income tax moves toward zero. We can’t afford to lower the safety net, given the needs for health care, education, housing, and action needed to address more frequent weather-related disasters. The state will also be shortly facing some draconian cuts in federal money if the Trump agenda of more tax cuts and cuts in services materialize. The outcome of state and federal tax cuts plus cuts in social services will only widen the disparity of the wealthy and poor. Kentuckians indeed deserve a better deal !