Smokers, Businesses Could Face Higher Taxes In Kentucky

FRANKFORT, Ky. (AP) - Smokers and businesses would shoulder much of the burden for balancing Kentucky's budget over the next two
years under tax increases approved by a legislative committee on
The House Appropriations and Revenue Committee voted 20-9 to
raise the state's cigarette tax by 25 cents a pack - a move that is
expected to generate nearly $200 million over the next two years to
help erase a projected $900 million budget deficit over the
two-year budget cycle that begins on July 1.
Other tobacco products also would also be taxed at higher rates,
as would air charters, armored car services, security services,
commercial janitorial services and linen services. Combined, those
taxes would generate an additional $95 million.
Budget committee Chairman Harry Moberly, D-Richmond, said the
increased taxes coupled with cost-saving provisions would generate
some $800 million over the next two years. One of the largest of
those provisions calls for restructuring and refinancing general
fund debts at lower interest rates, saving about $300 million over
two years.
Moberly said the House plan also calls for downsizing state
government by not filling job vacancies when employees retire and
for recalculating the state's "floating" gas tax quarterly rather
than yearly - a move that would more quickly raise state revenue as
fuel prices increase.
"If we don't pass this, I think the effect on the commonwealth
will be devastating," Moberly told lawmakers gathered in a crowded
legislative office building next door to the Capitol.
The legislation that contains the tax increases to balance the
state's $18.6 billion budget now goes to the full House for
consideration. The budget bill also passed the committee on Tuesday
and goes to the House.
"There will be political fallout from this for people who
support it," said state Rep. Jim Wayne, D-Louisville, who voted
for the measure. "There is no other alternative that is realistic
that can pass the House."
The additional revenue created under the measure will be used
across state government, particularly in education and human
Moberly said teachers would get a 4 percent pay raise over two
years at an additional cost of $195 million. Universities, he said,
would get $263 million, which would allow them to maintain current
programs without the threat of cuts.
About $130 million of the money generated would go to a variety
of health and human service programs, including Medicaid, which
provides medical care to the elderly and poor.
State Rep. Jimmie Lee, D-Elizabethtown, said he voted for the
taxes despite having two opponents in this year's legislative
"It's really difficult," he said, "to be an advocate for
education, an advocate for those who can't speak for themselves,
and then vote no today."
The legislation is House Bill 262.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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  • by smokin & payin Location: lexington on Mar 12, 2008 at 12:56 PM
    Let me get this straight, you want me to treat me like a second class citizen because I smoke, and then you want me to foot the bill and bail you out? What is wrong with this picture? If everybody quits smoking then we go further in the hole? How did this become my responsibility?
  • by harleyrider1978 on Mar 12, 2008 at 09:30 AM
    ITS really quite simple, first lower the cig tax, second outlaw all smoking bans in the state......force all public venues to provide smoking areas for smokers and smoking workers.....mandate social acceptance of the rights of smokers. increase the bed tax and mandate all no smoker discrimination in motel rooms or in the workplace or in health casinos and state run bingo halls........become the state that caters to smokers and start enjoying the revenues generated from people criminalized by other states. smokers like to spend their money where their needs and rights are appreciated. youll be the richest state around...and the envy of all the tobacco prohibitionist states.
  • by Jack Location: Wallins on Mar 12, 2008 at 09:07 AM
    It seems there would be other ways of increasing state revenue other than more taxes. The top paid state officials should be an example by taking a pay cut.
  • by Shantell Location: Mousie on Mar 12, 2008 at 08:07 AM
    i dont think its fair that us smokers take care of the bills..just because we smoke we should suffer even more??? isnt it already rediculous the prices we pay and now want to make us pay for them placing money in their pockets and expect us smokers to pay for it??? isnt cancer and such enough of a price? why not raise other taxes what about alcohol or sales tax to pay the bill ... im so sick and tired of this... and yes i have tried with all my heart to quit but NOTHING works for me.. isnt it time we find other ways to fix things besides taxing cigs? when gov needs money the first thing they come up with is raising cig prices well i say STOP its enough already! get off your arses and use your brains and figure out another thing to tax besides smokers we already treated like we have a horrible disease and are shunned in public..come on ppl more ppl die from alcohol so why not raise taxes on it? i've never heard of a car accident because the person was smoking.. have you?
  • by Goebel Location: Lexington on Mar 12, 2008 at 05:51 AM
    Focus on illegal drugs. Stop profiling smokers just because they are minorities.
  • by me Location: KY on Mar 12, 2008 at 05:37 AM
    Stop spending money you don't have and you won't have to raise taxes. When a problem arises, the first thing is raise taxes but that don't solve the problem. Spending money you don't have is. People pay out more taxes then some make for a living. Cost of living goes up and then the taxes so what good does a pay raise do? You don't see it cause the taxes takes it.
  • by don Location: virgie on Mar 12, 2008 at 05:18 AM
    i think it is wrong to tax we tobacco users to allow our unassuming politicians to continue to waste our taxes in this war that should have never happened
  • by WHY NOT Location: HAZARD on Mar 12, 2008 at 04:35 AM
  • by Cindy Location: London on Mar 11, 2008 at 09:44 PM
    My problem with the state raising taxes, it is always the poor who suffer, raise cigarette taxes to help pay for a budget just because smoking is considered uncool now. This is another way to force people to quit smoking because others don't like it. What happens when someone decides we don't need to eat meat? price it out of site too???? When will it all end??????? The budget is in the shape it is in due to higher spending, especially the legislature. I think it is time we call for them to take a pay cut, same as with our Congress, and make them pay into Social Security and have health insurance like the rest of us!!!!!!!!!!!!!!!!!!!
  • by Joyce Location: Ohio on Mar 11, 2008 at 08:56 PM
    Kids? Makes no sense at all. They get money to buy dope, so what is stopping them from buying cigarettes. You must be blind.
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