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January 1, 2018

Kentucky Chamber of Commerce will be at Legislative session advocating for businesses across the state

Chamber to ask for $1 cigarette tax

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When the Kentucky General Assembly gavels the 2018 session to order on Tuesday, the Kentucky Chamber of Commerce will be there advocating for businesses across the state.

"The two biggest issues are pension reform and a new two-year budget," David Adkisson, the state chamber's president, said recently. "I don't see how you can do one without the other. It might be best to consider them together."

He said, "Some people are talking about doing pension reform the first week of the session. But that would require complete agreement between the governor, the House and the Senate. And I don't see that right now."

Adkisson, a former Owensboro mayor, said, "We've been talking about this for years. We're the 49th or 50th worst state with unfunded pensions. We've dug this hole for ourselves. And we have to get ourselves out of it."

He said the state chamber is in favor of tax reform "if it makes Kentucky more competitive for jobs."

And Adkisson said the chamber isn't opposed to tax reform increasing the state's revenue.

But he said getting tax reform completed during the session is "a tall order to do that on top of the budget and pension reform."

State officials, Adkisson said, have to try to determine what impact the federal tax reform will have on the state's revenues.

"Right now, it looks like Kentucky will be a beneficiary state," Adkisson said, getting more revenue from the federal tax code change.

"But that's still a question mark," he said.

There are other issues the state chamber would like to see addressed, Adkisson said.

"We want to see essential skills -- soft skills -- added to the K-12 curriculum," he said. "Our workers comp system is outdated. It needs to be updated. It's a tax on every employer. We'd like to see peer review for doctors to allow them to share information in confidence. We're one of two states that doesn't have that."

$1 increase for cigarettes

Adkisson said the chamber is also pushing for a $1 increase in the state's cigarette tax.

That would raise the tax from the current 60 cents a pack to $1.60 -- the national median tax among the 50 states.

New York has the highest rate at $4.35. Missouri has the lowest at 17 cents.

Kentucky's cigarette tax ranks 43rd out of 50 states.

"The idea is to stop more people from smoking and to provide much needed revenue for the state," Adkisson said.

He said the chamber also wants to "see reforms to slow the growth of the prison population. It takes three times as much money to incarcerate someone as it does to send them to community college."

Adkisson said recent sexual harassment accusations in Frankfort have created a lot of drama that's taken attention away from legislation.

"The drama in Frankfort is pretty pervasive," he said.

Adkisson said the chamber also wants changes in the fuels tax that finances the state's transportation system.

"The road fund comes from a fuels tax," he said. "So electric cars pay nothing for maintenance of our highways. We're woefully short on money for highway repairs. We have to look at changes in where the money comes from."

All members of the House of Representatives will be up for election this year along with half of the Senate.

If a lot of challengers surface early, the election will add another dimension to the session, Adkisson said.

"But we can't run from these problems," he said. "Our budget challenge is probably the worst we've had in several decades. During the recession, the federal government bailed us out. But Washington isn't going to bail us out from this one. The pension deficit is something we did to ourselves. There will be no stimulus rescue this time."

 

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