Gov. Andy Beshear signed House Bill 1 into law, which will lower the state’s income tax from 4.5 to 4% on Jan. 1, 2024.
House Bill 1 codifies the cut in House Bill 8 — a bill passed during the 2022 legislative session that seeks to eliminate the income tax over ten years by half percent increments. Beshear vetoed House Bill 8, but the legislature overrode his veto in 2022.
In a Twitter video, Beshear said he wants to help Kentuckians fight the high costs of inflation. The best way to do that, he said, would’ve been to cut the sales tax, “but the General Assembly refused to go that route.”
Further, Beshear said he faced a bill that would lower the income tax that has some long-term repercussions for potentially funding state services but would put a couple of hundred dollars in the pockets of most Kentuckians.
Beshear also cited record budget surpluses as the reason for signing the bill into law.
“Right now, our economy can sustain not just a decrease in the income tax that has already happened, but another one, as well,” Beshear said.
The first cut occurred on Jan. 1, 2023, and took the income tax from 5 to 4.5%.
In late January, Gov. Andy Beshear wouldn’t say if he would veto the bill if it hit his desk. Instead, he said he would “carefully consider” it if it helps families in the short term.
“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 at the time.
The Republican Party of Kentucky said that Beshear is taking credit for Republican policy.
“Last year, Andy Beshear vetoed the process which makes today’s Republican tax cut possible,” said Republican Party Spokesman Sean Southard in a statement. “He has spent countless hours attacking Republicans for this policy approach and left the members of his own party out to dry on it.”
Further, Southard said Beshear is only signing it this year because it’s a gubernatorial election year.
“From his mishandling of our unemployment system, our Department of Juvenile Justice, his Team Kentucky Slush Fund, and the learning loss of our children, Andy knows he’s vulnerable to whoever wins the Republican primary for Governor,” Southard said. “It is a blatant political move, and Kentuckians will see through it.”