Governor Beshear’s support for reducing the state sales tax from 6 to 5 percent for one year is drawing the ire of some Kentucky Senate GOP members. The governor voiced his support this week to a bill offered by Whitesburg Democratic Representative Angie Hatton. Senate Budget Committee Chair Chris McDaniel said the proposed sales tax cut and the governor’s budget don’t mesh.
“With the governor’s proposal he removes 873 million dollars from the first year of his proposed biennial budget which necessarily puts his budget out of balance,” said McDaniel.
Senate President Robert Stivers says following through with this sales tax change would necessitate cuts in proposed state funding.
During his news conference this week, Governor Beshear said there would be no need to dip into the state’s rainy-day fund.
“And then what we do is we finance some of the one-time spending that we were doing with general fund dollars. We’re able to do that because we had the least amount of borrowing in our budget compared to old budgets that we’ve seen really since we started setting a threshold for,” said Beshear.
The governor said this reduction in the sales tax would benefit all Kentuckians of all incomes. He added it would help families until the high U.S. annual inflation rate retreats.
McDaniel said using federal coronavirus relief dollars to offset losses due to the tax break is not feasible. The GOP lawmaker added those funds were appropriated in the governor’s budget.