Press Room
Testimony
on Tax Justice 2006
Kentucky
Can Do Better!
The House Appropriations & Revenue Committee heard testimony on HB 506:The Tax Justice Bill sponsored by Rep. Jim Wayne and supported by KEJA partners on Tuesday, Feb. 7, 2006.
Kirk Owens, Steve Boyce, Bill Stolte, and Debra Miller testified, along with Rep. Wayne. Also, Rep. Moberly, Rep. Napier, Rep. Marzian and Rep. Lee spoke in support of the legislation. No one spoke against it.
Here is a sampling of testimony and comments.
Testimony from Kirk
Owens:
“You folks track the numbers. You know what’s going up and
what’s going down. And after years of budget cuts and chronic under-funding
of public programs, Kentucky is in danger of sliding backwards.
Kentucky ranks 50th in per capita spending on education. From1999 to 2004,
tuition per student rose 33% while state higher education funding per
student fell by 8%. Kentucky’s poverty rate increased faster than
all but one other state between 2003and 2004. We fell five spots last
year to 42nd in overall child well-being, while unemployment roase in
117 out of 120 counties.
These facts are not new. Yet many lawmakers are avoiding the hard truth
that your work to reform Kentucky’s tax system is far from complete.
Revenue neutral tax reform does not allow adequate investments in education,
health care and other essential services. And despite some progress, we
still have a tax system that asks the most from those who have least,
and asks the least from those who have most.
Last week I had the opportunity
to sit in on a discussion of the House Budget Review subcommittee on Education.
The university presidents were there. The room was packed, but I noticed
few if any students or parents present. I didn’t hear one legislator
or university president call for a moratorium on tuition increases.
Sitting in that hearing, it became clear to me that we aren’t even
having the right conversation in Kentucky. We are in an era of tight budgets
and the federal government is sending less money back to the states. Of
course Kentucky has to make adjustments. But please don’t make those
adjustments on the backs of those who can’t defend themselves or
make themselves heard in Frankfort. The people of Kentucky deserve a real
conversation about adjustments that are fair and wise, not just about
those that are politically easy.
That’s why we are hear today. HB 506 outlines a set of fair tax
reforms that will support the kinds of investments Kentucky needs to grow.
Taken together, the reforms in this bill would raise about $200 million
in new revenue and direct $82 million to Kentucky’s working poor
families and their communities. We welcome this change to offer positive,
reasonable alternatives to the conversation."
From Rep. Jim Wayne:
“This is not radical legislation. What I’m proposing is reasonable
and modest. This legislation moves our tax system in the right direction,
in the direction of greater fairness.”
Rep. Wayne used large charts to explain the overall unfairness of Kentucky’s
tax system. He then explained the basic elements of the bill, including
sales tax on some services, an EITC, progressive income tax brackets and
preserving the estate tax. He highlighted the LRC’s fiscal note
which indicates the bill would raise $192 million.
Rep. Wayne quoted from Kentucky Author Wendell Berry, who said, "Rats
and roaches live by competition under the laws of supply and demand; it
is the privilege of human beings to live under the laws of justice and
mercy.”
From KYA Policy Director Debra Miller:
“The Earned Income Tax Credit is widely recognized as the number
one poverty fighter at the federal level.”
Miller explained that a 15% refundable state EITC would direct $82 million
back into local communities across Kentucky. That is money that is spent
locally.
She also responded to a question about child poverty from Rep. Harry Moberly.
“Our poverty numbers, like the nation’s, improved during the
1990’s. Since the change of the century, we’ve been headed
in the wrong direction. Child poverty is on the rise in Kentucky and nationally.
Today in Kentucky, 23% of our children live in poverty, and fully half
live below 200% of the federal poverty line."
From Steve Boyce, Berea,
KY:
“I felt moved to speak with you after talking with a legislator
last week who asked, 'Didn’t we take care of low-income tax payers
last year?' I would hope to address any confusion on that point. The answer
is clearly ‘no.’ Some good things did happen, but Kentucky’s
overall tax structure remains regressive.”
From Bill Stolte, Berea, KY:
“Many mornings I find myself asking myself, ‘Why am I here?’
You should ask why you are here.
I started paying attention to taxes when I got involved with Habitat for
Humanity. I realized that Habitat families, who are working poor, pay
more in state income tax than I do. My wife and I may have a six figure
income, but we each receive senior citizen exemptions worth nearly $90,000.
And we get a reduction on our property tax. What’s fair about that?
This is a call for justice.
I urge you to pay close attention to parts of this bill that merit more
than just discussion. The estate tax is on a path to be phased out with
the federal tax, and Kentucky will lose $50 million a year. Don’t
just talk about that. Act on it. Stem the tide. Ladies and gentlemen,
we need to do more than simply sit and discuss."
Comments from Legislators:
Rep. Napier: “Some of us have been more fortunate than others. I
can afford to pay a little more. What’s wrong with that when we
have state employees who are not paid enough to support their families?”
Rep. Moberly: “Your bill is well thought out. Rep. Wayne is the
conscience of the General Assembly. I think it is a disgrace that we have
so many children living in poverty. And even with an economic recovery,
we do not have enough revenue to meet the needs of the Commonwealth.
Rep. Jimmy Lee: “I too applaud your bringing these facts and this
proposal to the General Assembly. We are fast reaching a crisis point.
The train is heading over the cliff. I chair the budget subcommittee for
health and human services. Right now I have $65 million in requests just
to continue existing services. We have increasing numbers of people needing
services, and I don’t have the money to work with. We are going
to have to decide very soon if we are going to act before the train goes
off the track. In the foster care program alone, we risk dismantling the
infrastructure that has been created to care for children who for some
reason are not in the care of their family. We don’t provide enough
benefit to the foster family to keep up a household, and we haven’t
increased the amount in years. As a member of society, I’m ashamed.
We should be investing in these kids to break the cycle. We would save
money in the future if we would invest in these children now.”
Rep. Mary Lou Marzian: I don’t know how much longer we as a legislative
body will sit here and talk about the budget being in the toilet. I’m
prepared to vote on this bill today. We can take some bold steps and do
something postive. It is time. The train has left. Be brave. Be courageous.
Pass legislation that can help Kentucky famiies.
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