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Wednesday, February 5, 2003

No chance on tax, Patton told


House leaders have their own plan

By Charles Wolfe
The Associated Press

FRANKFORT - A tax increase Gov. Paul Patton plans to propose to the General Assembly today "has no chance to pass," the chairman of the House budget committee said Tuesday.

Instead, House leaders have drawn up their own framework of a budget that largely spares elementary and secondary education, though it would make some deep cuts elsewhere in state government, Rep. Harry Moberly said.

As for Patton's tax plan, "it will get a hearing," Moberly, D-Richmond, said in an interview.

The tax plan Patton is to describe to a joint session of the legislature tonight would raise $570 million, largely from business, to cover the rest of the current fiscal year and a shortfall for 2004 projected at nearly $400 million.

Patton said he would make 18 different tax proposals, three or four of which would be tax cuts.

Rep. Joe Barrows, who as majority whip is the chief Democratic vote counter in the House, said it was a "complete impracticality" to try to raise taxes in the General Assembly's 30-day, off-year session. Barrows, D-Versailles, said it would take nearly the remainder of the session to pass a budget bill uncomplicated by taxes.

As an alternative, and to avoid prolonging the legislature's embarrassment of having failed to enact a biennial budget nearly a year ago, Moberly and other ranking House members settled on a stripped-down spending plan that, for the most part, would match available revenues.

It would require government spending to be reduced 2.6 percent through the end of fiscal 2004, Moberly said.

Because elementary and secondary education would be exempted, as would certain, unspecified human services, cuts would have to be deeper in other areas to compensate, he said.

To find room for some of those cuts, he said legislators were looking at "nonmerit" state jobs - those with no civil service protection. In addition, agencies would be forced to cut spending on nonbid contracts, he said.

Senate President David Williams, leader of the Senate's 22-member Republican majority, said the House proposal described by Moberly "conforms with our vision of what the next budget should look like."

"I've often said that at the present time I see no support over here in the Senate for new taxes, and we'll just wait to see what the budget proposal comes from over there, and I'll take the chairman at his word that there aren't going to be any tax increases," said Williams, R-Burkesville.

The House budget would not be totally devoid of tax changes, Moberly said.

It would include some comparatively minor tax increases that the House approved a year ago in a budget bill that never became law. Moberly said they amounted to about $15 million a year. They could include extending the states sales tax to certain natural gas purchases and to Internet purchases from companies - Wal-Mart, for example - that also have stores in Kentucky. The list also is thought to include elimination of the state deduction for income taxes paid to a foreign government.

Seemingly undeterred, Patton on Tuesday continued to maintain that businesses in the state aren't paying their fair share and that the legislature has time to pass a fair tax package that would eliminate the need for further cuts to state government spending.




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