Gov. Andy Beshear wouldn’t say if he would veto House Bill 1, the income tax bill set to be taken up by the Senate next week when the Kentucky legislature reconvenes in Frankfort for the second part of the 30-day legislative session.
After speaking at the Government Forum for the Northern Kentucky Chamber, Beshear said he would look closely at the bill to further reduce the income tax from 4.5 to 4% on Jan. 1, 2024.
Instead, Beshear diverted attention to the sales tax — which increases in certain areas under House Bill 1 to compensate for lost revenue from reducing the income tax.
“Certainly, the best plan of action to provide people relief would be a temporary reduction of the sales tax,” Beshear said. “When we talk about inflation. It’s that things cost too much.”
Beshear, who faces reelection in 2023, said that while the bill could potentially harm families in the long run, he will consider whether it helps families in the near future.
“While it may hurt our fiscal stability in the long run, I’m gonna have to look at how it can help our families now, so we’ll carefully consider it,” Beshear said.
The bill passed the House in early January before heading to the Senate.
House Bill 1 is a key piece of Republican legislation during the 2023 session. The new bill codifies language from 2022’s House Bill 8, which sought to eliminate the income tax slowly.
The first reduction occurred on Jan. 1, 2023, when the tax decreased from 5 to 4.5%.
Passing along a near-party line vote of 79-19, the bill moved to the Senate. The bill passed the House Appropriations and Revenue Committee 16-4, and will head to the Senate’s A&R Committee when session reconvenes.
“We are committed to ensuring its quick passage shortly after we return for the regular session of the general assembly,” said Senate A&R Chair Sen. Chris McDaniel (R-Ryland Heights).
Before appearing at the Covington Radisson for the Government Forum, Beshear cut the ribbon on the newly renovated headquarters for Ancra Cargo. The $8 million project created more than 50 new full-time positions, increasing their staff by more than half.
At times, Beshear has said Kentucky’s economy “is on fire” and often highlights the state’s economic achievements as he heads toward the general election. First, 12 Republicans are vying to win the nomination to face Beshear in the general election.
Northern Kentucky Rep. Steve Rawlings (R-Burlington) noted that job growth and attracting talent to the state were part of Beshear’s comments during a question and answer session toward the end of the forum.
“That was a big part of the discussion there with his question and answers, and so I would think that he would be quick to sign,” Rawlings said.
If Beshear does veto the bill, the legislature could easily override it with supermajorities in both chambers.
“There’s plenty of votes to override any veto, so it will go into effect,” Rawlings said.