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July 2, 2018

PSC approved changes that will have the net effect of reducing an average monthly residential bill by $5.90 for the remainder of 2018

The Kentucky Public Service Commission has completed its review of the effect of federal corporate income tax reductions on the rates of Kentucky Power Co. and ordered further reductions of those rates.

In a pair of orders issued last week, the PSC approved changes that will have the net effect of reducing an average monthly residential bill by $5.90 for the remainder of 2018. The rates approved today take effect July 1 and will remain in place at least through 2020; Kentucky Power has agreed not to seek an adjustment to base rates to take effect prior to January 2021.

For the first six months of 2018, the average monthly residential bill has been about $151.45, a figure that includes base rates and all surcharges, but not local government fees and taxes. That same bill now will be $145.55, a decrease of $5.90, or about 3.9 percent. Individual bills will vary with usage.

Approximate average monthly usage for Kentucky Power residential customers is 1,300 kilowatt-hours. A kilowatt-hour (kWh) is the amount of electricity used by a 100-watt lightbulb in 10 hours.

In orders issued in January, the PSC adjusted Kentucky Power’s base rates and reduced spending on energy efficiency programs, thereby reducing the amount residential customers were charged for those programs. The net effect of the January orders was to reduce average monthly residential bills by about $6.38.

The January base rate order addressed the immediate impact of the corporate income tax reduction – a cut from 35 percent to 21 percent – that took effect at the start of this year. The remaining portion, most of it tied to deferred federal tax liabilities, was dealt with through a complaint filed by the Kentucky Industrial Utility Customers, Inc., an organization representing large industrial power users.

In that proceeding, Kentucky Power and KIUC reached a settlement in April. The Kentucky Office of Attorney General did not participate in the settlement, but offered no objection to it.

The settlement calls for a credit to be applied to all customer bills to reflect the federal tax cut. Today’s PSC order in the case approves the settlement as submitted.

For residential customers, the credit for the remainder of 2018 will be about 48 cents per kWh, which will decrease the average monthly bill by $6.24.

Over the next two years, the amount of the credit will decline. For residential customers, it will be larger during the heating season in order to have more effect at the time of year when electric consumption in Kentucky Power’s service territory tends to be higher.

In 2019, the residential credit in January, February, March and December will be about 36 cents per kWh, and 10 cents per kWh during the other eight months of the year. The heating season credit in 2020 will be about 37 cents per kWh, and 10 cents per kWh for the rest of the year.

The second order issued today dealt with requests from both Kentucky Power and KIUC that the PSC reconsider aspects of the decision it reached in January in the base rate case. Both sought a rehearing of issues stemming from the changes to the federal tax law. Other than the Attorney General, the other six parties to the original case did not participate in the rehearing.

Kentucky Power and KIUC also reached a settlement in the rehearing of the rate case. The settlement increases Kentucky Power’s allowed annual revenue by $765,030 to reflect a recalculation of the immediate impacts of the federal tax changes that were included in the PSC’s January order in the base rate case.

The increased revenue figure in the settlement increases average monthly residential bills by 34 cents. But that increase is more than offset by the $6.24 decrease in the parallel case.

The order in the rate case rehearing accepts the settlement with a modification to allocate the slight rate increase in a manner consistent with the one adopted in the original rate case order in January.

The orders and other records in both cases are available on the PSC website, psc.ky.gov. The case number in the rate case is 2017-00179; the KIUC complaint case is 2018-00035.

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The PSC is an independent agency attached for administrative purposes to the Energy and Environment Cabinet. It regulates more than 1,100 gas, water, sewer, electric and telecommunication utilities operating in Kentucky.

From Kentucky Public Service Commission

July 2, 2018

Changes to Kentucky’s sales tax laws take effect today which means residents will be paying tax on some services for the first time, as well as a higher cigarette tax.

Ky. implements 50 cent cigarette excise tax vapor products spared.Ky. implements 50 cent cigarette excise tax vapor products spared.

House Bill 487, effective July 1, brings sales tax to several service items and also taxes cigarettes at 50 cents more per pack. (Photo by Tom Latek,Kentucky Today)

House Bill 487, enacted by the 2018 General Assembly, adds a six percent sales tax on the following services:

• Extended warranty services
• Facility/event admission fees
• Indoor tanning services
• Labor charges for installation or repair of tangible person property, digital property or services sold
• Landscape services
• Limousine services
• Laundry and dry cleaning
• Non-medical diet and weight-reducing services
• Pet care services
• Campground rental
• Veterinary services for dogs and cats, but not for equine, cattle, swine, sheep, goats, llamas, alpacas, ratite birds, buffalo, and cervids (such as deer).
Pamela Trautner, spokesperson for the Kentucky Finance and Administration Cabinet, said “Nothing in HB 487 changes the status of sales of tangible person property at retail by governmental entities or any non-profits, as they were already subject to sales tax.”

But there are exceptions: “The sale of licenses by state and local government entities are not taxable as admissions,” she said. “That includes driver’s, hunting and fishing licenses, occupational licenses and alcohol licenses. None of these are taxable.”

There are also some new or increased “sin taxes.”

The bill includes a 50 cents per pack cigarette tax increase, effective July 1. In addition, a cigarette inventory floor stocks tax of 50 cents was enacted. All cigarette licensees and retailers of cigarettes must take a physical inventory as of June 30 at 11:59 p.m. and file and pay the inventory floor stocks tax.

A change to the alcoholic beverage statutes requires microbrewers to report and pay state excise taxes directly to the Department of Revenue.

There have been numerous changes to income tax deductions. Home mortgage interest and charitable contributions are still allowable for those who file itemized returns, but most others have been eliminated, including premiums paid for health care or long-term care insurance.

The previous tax brackets based on income have been eliminated and replaced with a flat five percent tax rate.

Other changes include:

• The itemized deduction dollar limit cap was eliminated
•Investment income earned on a STABLE account is no longer taxed
• The pension exclusion decreased from $41,110 to $31,110. You are still entitled to exclude more than $31,110 if you are retired from the federal government, the Commonwealth of Kentucky, or a Kentucky local government and a portion of your pension income is attributable to federal or Kentucky government service performed prior to January 1, 1998.

• $10 personal tax credit for taxpayers and dependent were eliminated, however personal tax credits for those over age 65, blind, and National Guard members were maintained

Trautner said the Department of Revenue has been busy notifying everyone involved of the impending changes.

“DOR has met with the Kentucky Retail Federation, Kentucky Society of CPAs and other groups to disseminate the information to their members. They made a presentation to the Kentucky Chamber of Commerce Summit on Tax Reform, sent out thousands of letters to business entities alerting them to the changes, been on radio call-in shows and will participate in a call-in show on KET, July 9.”

According to Deputy State Budget Director Greg Harkenrider, the changes are expected to generate an additional $192 million in revenue to the state next year.

Another change to the tax system will result from a recent U.S. Supreme Court decision to allow states to collect sales tax on out-of-state purchases made from a catalog or online.

While the U.S. Government Accounting Office estimates Kentucky could see an additional $90 to $140 million in revenue, Harkenrider said, that was “a little on the high side.” An exact figure cannot be calculated until out of state businesses enroll in the collection system, Harkenrider said.

The taxes may be collected from out of state firms that have either 200 transactions or $100,000 in annual sales in Kentucky. Harkenrider said legislation passed by the 2018 General Assembly in anticipation of the high court decision mirrors the South Dakota law upheld by the justices.

 

By Tom Latek
Kentucky Today

 

June 30, 2018

Work requirements were set to begin Monday in Northern Ky.

Official says many cancer patient treatments would be affected if Bevin's Kentucky HEALTH is implemented

A federal judge ruled Friday the Department of Health and Human Services (HHS) failed to adequately consider how Kentucky’s proposed Medicaid work rules would affect residents’ access to health care as required under federal law.

The ruling halts implementation of the state’s proposal which would have required Medicaid recipients to work, volunteer or otherwise engage in community activity in order to receive benefits.

Judge BoasbergJudge BoasbergKentucky’s Sec. 1115 waiver plan called “Kentucky HEALTH,” was set to take effect on July 1. The judge’s decision remands the Kentucky waiver plan back to the U.S. Department of Health and Human Services (HHS) to reconsider it in accordance with Sec. 1115 of the Medicaid AcT. 

Sixteen low-income Kentuckians challenged federal approval of Governor Bevin’s Medicaid waiver plan. In the opinion issued Friday, federal district Judge James Boasberg favored the plaintiffs, vacating the Health and Human Services (HHS) Secretary’s approval of Kentucky’s 1115 Waiver known as Kentucky HEALTH.
Judge Boasberg is a U.S. District Judge on the District Court for the District of Columbia.

The judge’s ruling blocks implementation of the waiver in its current form.

Because of the ruling, Kentuckians will continue to be able to access health care services through Medicaid.

Thirteen states have applied to the federal government to implement similar work requirements. Kentucky was the first state to receive approval for its request.

Kentucky Cabinet for Health and Family Services (CHFS) Secretary Adam Meier said, “The Court’s ruling invalidates Kentucky HEALTH on a very narrow basis. The Court concluded that the HHS Secretary simply failed to consider the impact of Kentucky HEALTH on Medicaid coverage.

“While we disagree with the Court’s ruling, which delays implementation of Kentucky HEALTH, we look forward to working with CMS to quickly resolve the single issue raised by the Court so that we can move forward with Kentucky HEALTH.

Without prompt implementation of Kentucky HEALTH, we will have no choice but to make significant benefit reductions.

Click to read ruling

 

“Kentucky HEALTH is an innovative, thoughtfully crafted program that will strengthen Medicaid by engaging beneficiaries in their own health outcomes. Able-bodied Kentuckians deserve to have a stake in their health and will benefit from the dignity that comes from career training, education, and volunteer opportunities that are available as part of Kentucky HEALTH’s community engagement program. We will fight to preserve these opportunities for our citizens so that we can proceed with the only viable path forward for expanded Medicaid in Kentucky,” Meier added.

A statement from Chris Hansen, president of the American Cancer Society Cancer Action Network (ACS CAN) follows:

“Medicaid is an essential source of health coverage for 2.3 million Americans with a history of cancer and millions more who are at risk for the disease. The program enables patients to get timely cancer screenings, appropriate cancer treatment, and long-term follow-up care. As cancer treatment can sometimes be debilitating, patients often find themselves unable to work or are advised not to by their physicians. Meeting reporting requirements or maintaining work to keep their Medicaid coverage could be overly challenging for cancer patients and survivors due to ongoing symptom management and could result in worse health outcomes.

“Preserving access to Medicaid without additional obstacles, like work requirements, is essential to ensuring cancer patients and those with other serious diseases can get the care they need.

“We will continue to work with states across the country to expand access to quality health care.”

 

 

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