Tuesday, January 7, 2003

Patton outlines tax-hike targets

Excise sales, corporations top list

By Mark R. Chellgren
The Associated Press

FRANKFORT - Smokers, drinkers and Kentucky corporations are among the potential sources of new tax revenue Gov. Paul Patton is considering to shore up Kentucky's beleaguered budget.

Mr. Patton gave a peek at some of the nooks and crannies he has been examining forwhat is projected to be a $500 million budget shortfall in the next 18 months.

During an appearance before a pre-legislative conference of editors and broadcasters sponsored by The Associated Press, Mr. Patton rattled off a series of statistics about cigarette tax increases. While the national average for the tax on a pack of cigarettes is now 58 cents, compared with Kentucky's 3 cents, the average of Kentucky's biggest competitors for sales is 20 cents. A 20-cent tax would raise $75 million a year. And Mr. Patton tried to make the case that the state has done much for tobacco farmers, who are not really hurt by a higher tax in any event.

Kentucky also does not tax alcoholic beverage sales, except for consumption on the premises, such as a bar or restaurant. Mr. Patton said there was no reasonable justification for such an exemption and removing it would raise $24 million a year.

Mr. Patton also repeated the case he has been making for several months that corporate taxes have not kept up. Corporate taxes as a portion of the entire General Fund are half of what they were in 1990, when they were increased, Mr. Patton said. Just returning the taxes to their previous level would raise about $350 million a year.

Although he has been careful to avoid taking a public position on budget cuts versus tax increases as a way to get out of the half-billion dollar budget mess, it is clear Mr. Patton is leaning toward making a proposal for overhauling taxes. He made such a proposal in 2000 but was ignored by the General Assembly.

Legislators now face a session starting today in which they still have not fulfilled their obligation to pass a budget.

Girl, 17, killed while holding child
Lottery sales up, but profit misses goal
Boyles gets 13 years in ex-girlfriend's death
Buckeyes gear flies out of stores
Troops ship out by the thousands

PULFER: Helping kids early and often
RADEL: Second job was what he wanted

Mt. Healthy stops school bus service
Mom, daughter killed in crash
School board elects Warner president
New police oversight agency meets
Another local boy joins Vienna choir
Donation to pay for flags on firetrucks
Firefighters, police aid McDonald House

3 suing to stay can - for now
Class-action suit sought on Oxycontin
Obituary: Ruth Shaffer, 92, was organist
Obituary: Alfred Wilhelm, Diamond executive
Good News: Travel show partnering in coat drive

Perjury an issue in Butler courts
Deadly road gets rumble strips
Boil-water warning wasn't heard
Policeman hurt while questioning motorist
Fairfield laboratories focus on heart disease

Attempted murder added to charges
Rapist found slain in cell

Ohio Moments: Midwest got a taste of Antarctica's weather
Blackwell: GOP should boost black staffing
Village ponders ads on cruisers

Democratic strategy session moved
Another local auto business burgled
Patton outlines tax-hike targets
Voters get voice at town meeting
$10M grant to help Kentucky's jobless
Jackson to run for Ky. governor
Around the Commonwealth