Kentucky Political News Headlines

Friday, November 10, 2017

Statement from Kentucky House Speaker Pro Tempore David Osborne, House Majority Leader Jonathan Shell, Majority Whip Kevin Bratcher, and Majority Caucus Chairman David Meade



KENTUCKY HOUSE REPUBLICAN CAUCUS


FOR IMMEDIATE RELEASE
Update from Thursday, November 9, 2017

Statement from Kentucky House Speaker Pro Tempore
David Osborne, House Majority Leader Jonathan Shell, Majority Whip Kevin Bratcher, and Majority Caucus Chairman David Meade
Update on Independent Investigation and Policy Work

FRANKFORT, Ky. (November 9, 2017) – "We wanted to offer a report to the media and public about the independent investigation we launched into the allegations and reports of inappropriate conduct swirling in the state capitol.
The law firm of Middleton Reutlinger has begun its work. They are simultaneously advising us on personnel and human resources matters while handling the preliminary phase of the independent investigation. Our outside counsel has advised us that they should be able to provide a preliminary investigatory report in about ten days. At that point, we will review the findings and make further decisions about how to proceed.
We may—as some have suggested—decide to turn the matter over to the Legislative Ethics Commission, as they have unfettered subpoena power. We may also decide that our outside firm can complete the independent review. We won't know the right path forward until we see the preliminary report, but we are keeping all of our options open. Ultimately, we want the deepest, most independent investigation possible. We intend to make decisions about our caucus and staff when the full facts emerge. None of us condone sexual harassment or inappropriate behavior, and we want the facts about anything and everything that happened.
Speaker Pro Tempore Osborne and Majority Leadership met with House Democratic Leader Rocky Adkins about this situation and appreciated the constructive conversation. At this point, the independent investigation is underway and should not be interrupted by politics or personal emotions. The facts should be allowed to emerge and guide future decisions. We will report back to the media and public on the status of the investigation when Middleton Reutlinger has delivered its preliminary review. If anything changes with the status of the investigation, we will alert the House and public immediately.
We have taken some internal caucus actions because of this situation. The Leadership Team has appointed Representative Jerry Miller of Louisville as Co-Chairman of the Public Pension Oversight Board. Vice-Chairs of two other affected committees have been elevated to Chairman. Additionally, Representative Myron Dossett of Pembroke has been elevated to a subcommittee chairman.
As this investigation unfolds, we are simultaneously keeping the House on track by working in good faith with the Senate and the Governor on the pension issue. Additionally, meetings of the Adoption and Infrastructure working groups continued this week, two critical policy matters. Budget Review Subcommittees also continued their work this week in preparation for the upcoming budget session. The entire Leadership Team is committed to an orderly budget process, as the Commonwealth faces extremely difficult fiscal circumstances. 
The Leadership Team is grateful for all members of the Republican Caucus and the entire House of Representatives for continuing to represent their constituents and doing the work of the people as the independent investigation unfolds. We also appreciate the ongoing dialogue with Governor Matt Bevin as we tackle the difficult issues of the Commonwealth.  Our message to the people of Kentucky continues to be that we will not fail you in finding the facts or in solving the severe financial problems facing our state."
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Sunday, November 5, 2017

Speaker Steps Down

Late last week, the media reported that the Speaker of the House Jeff Hoover (R-Jamestown) had secretly settled a sexual harassment complaint with a member of his staff. The media reports included suggestive text messages between the staffer and the Speaker. Additional media reports have identified several other GOP House members (Rep. Jim Decesare, Rep. Brian Linder, and Rep. Michael Meredith) and House leadership staff that may have been involved or knowledgeable about the settlement. There were even mentions of an FBI investigation. After calls for the Hoover’s resignation from several GOP House members and the Governor, he ultimately stepped down from his leadership post on Sunday, but maintains his House seat.

This media report gives a good timeline of the entire situation.

According to this statement by the House GOP Leadership:
- Speaker Pro-Tem David Osborne has taken over the operations of the House;
- An independent investigation to look into the matter has been established;
- The three members listed above have all been stripped of their Chairmanships until the independent investigation is completed; and
- The House GOP Leadership team will meet with legal counsel this week to determine actions in regards to staff.

A new Speaker cannot be elected officially until the House is back in session as the Speaker is a constitutional officer and elected by the entire body of the House. However, the House GOP caucus could nominate a new Speaker in the near future pending ratification once the legislature is back in session.

This scandal certainly comes at a critical time for the legislature as they are working with the Governor to craft a public employee pension reform bill to pass in a special session before the end of the year. This will likely have some impact on that process.    

Monday, October 30, 2017

Pension Bill & Resources

Over the weekend the draft public employee pension reform legislation was released and a copy is available for download below. In addition, we have provided download links for a couple of other resources. As of this post, no date for a special session to consider the draft bill has been set.

Pension Reform Draft

Section by Section Summary

Side by Side Comparison

Thursday, September 21, 2017

KY Chamber Tax Summit


The Kentucky Chamber of Commerce held a Tax Summit in Lexington yesterday.  The conference was well attended and included approximately ten House members who attended as participants.  Governor Bevin was called to a meeting in DC and unable to speak in person, however, he sent a video where he discussed his vision for tax reform in Kentucky.  Additionally, Speaker Hoover was added to the agenda and spoke during lunch. A complete summary is below, but a few highlights to make you aware of:

  • Speaker Hoover announced that the House will appoint a Working Group on Tax Reform to begin meeting after the special session on pension reform. 
  • All speakers seemed to advocate moving from an income based taxing system to a consumption based system.
  • Multiple speakers, including the Governor and Speaker Hoover, indicated complete elimination of the income tax isn't feasible, and decreases would need to be phased in.
  • Local governments will no longer advocate for LIFT, which limits local options sales tax to specific projects with a sunset period.  Instead they will advocate for broad authority related to local option sales tax.
  • Everything is on the table.
  • Reviewing tax expenditures will be a key part of the process.  The Governor has often said that Kentucky's exemptions are more than revenues. 
Jennifer Barber, with Frost Brown Todd, began the conference with a presentation on what tax reform in KY might look like.  Her slide presentation is attached.  Jennifer noted that an additional 1 cent on the sales tax would raise approximately 580M annually and if the sales tax was expanded to include services, an additional 2.78B would be realized.


Dr. Bill Fox, from the University of Tennessee, and well known to those who've followed various tax reform efforts in Kentucky was the next presenter.  His slides are available HERE.  Dr. Fox identified the key elements of a good tax system to be: raising appropriate level of revenues, a system that provides competitiveness, low administration and compliance costs, and a system that is fair.  He also suggested that state and local taxes should be looked at together.  Kentucky is relatively low compared to the national average (ranked 40th) when looking at total state and local tax collection and Kentucky is also weak in revenue growth.  Dr. Fox outlined the following policy options:

  • Broaden the tax base and lower the rates in order to make the system more elastic and reduce behavioral distortions.
  • Enhance KY's competitiveness by shifting to more consumption and less to capital and labor taxation.
Dr. Fox goes on to discuss specific recommendations which you can find in slides 17 through 22 of his presentation.

There was a panel discussion on local government and local issues.  Participating in the panel were JD Chaney (KY League of Cities), Eric Kennedy (KY School Boards Association) and Judge Tommy Turner (KY Association of Counties).  As mentioned earlier, a main takeaway was that local governments are no longer going to focus on the LIFT approach but rather support broad constitutional authority for a local sales tax.  The panel agreed that if given the local option authority they would be willing to have a discussion on the repeal of other taxes, like the inventory tax that Governor Bevin has suggested he'd like to see repealed.  The group said that statewide, the inventory tax provides roughly 140M annually. KSBA mentioned that, if given the opportunity, they'd like to see a reform of the SEEK formula included in tax reform, but seemed to recognize that might not be feasible. Finally, in response to questions about streamlining procedures, local governments shared that they are not in favor of centralized collection.


There was also a panel with policymakers that included Senator Ralph Alvarado, Rep. Jonathan Shell, Budget Director John Chilton and moderated by Mark Sommer.  Sommer had several slides and they are available HERE.  


Sommer asked the group what tax reform / tax modernization actually means.  Several of the responses included looking at a code that has not changed in many years, moving away from a system where prosperity is taxed thereby placing KY at a competitive disadvantage, and including in the system the ability to reward and retain current industry/employers, in addition to creating a system that will attract new job. Sommer questioned whether lawmakers should look at treating for-profit medical systems the same as not-for-profit systems, specific to property tax and briefly mentioned the unfairness of the provider tax.  

In response to a question about the LLET tax, and how burdensome it is to small employers, Director Chilton explained that the state receives 80M in revenues annually from this tax.  Rep. Shell discussed the need to look at the sales tax exemptions and also talked about the need to phase down the income tax rates and explained that complete elimination would require too much of an increase in the sales tax - roughly 14% to 15%.  Senator Alvarado mentioned the possibility of taxing opioids.  Last session, there was legislation introduced to do this, however it did not move.  Rep. Shell ended the discussion by talking about the need for a broad look at tax reform and the need to shift ability and responsibility to local governments.

Juva Barber (KBT), Nick D'Andrea (UPS), and Laurie Maudlin (Appian in Indiana) were speakers for the panel on Infrastructure.  Barber outlined the need for additional infrastructure funding, to not only maintain the current system but also to address new projects.  She discussed the problems with funding improvements to Kentucky's roadways, but also the need to invest more in the other modes of transportation, specifically rail, aviation, waterways, and public transit.  She mentioned the KY Infrastructure Coalition, which has been formed to advocate for additional transportation infrastructure funding.  Maudlin talked about her involvement in the successful effort in Indiana to raise additional revenue for transportation.  She shared that their success began with being able to demonstrate to policymakers that all other options had been explored and that raising the gas tax was the only option left.  D'Andrea talked about the UPS decision to invest so heavily in Kentucky and that without adequate infrastructure that would not have happened, but that continued improvements are needed as well as mega projects like the Brent Spence Bridge.  D'Andrea discussed the successful Tennessee effort and explained that a big part of that success was being able to work with legislators to identify what projects would be addressed with the increased revenue.

There were also panels that included national organizations to discuss tax reform at the state level and at the federal level, with much of the same information that Jennifer Barber and Dr. Fox used in their presentations.



Friday, September 8, 2017

SENATOR JIMMY HIGDON ELECTED AS NEW KENTUCKY SENATE PRESIDENT PRO TEMPORE




Commonwealth of Kentucky
Senate Majority Office

FOR IMMEDIATE RELEASE
September 8, 2017
Contact: John Cox
John.Cox@LRC.KY.GOV

SENATOR JIMMY HIGDON ELECTED AS NEW KENTUCKY SENATE PRESIDENT PRO TEMPORE

FRANKFORT, Ky. (Friday, September 8, 2017) – The Kentucky Senate Majority Caucus announced Friday that Senator Jimmy Higdon (R-Lebanon) has been chosen by his peers to serve as the new President Pro Tempore in the Kentucky Senate. Senator Higdon replaces Senator David Givens (R-Greensburg) who resigned from his seat in Senate leadership in June citing personal reasons.

"I was sad to see Senator Givens step down, but I am honored to serve in this new capacity in Senate leadership, and I appreciate all of my colleagues for granting me this special opportunity," Senator Higdon said Friday. "I certainly have some big shoes to fill, but Senator Givens has been supportive, and I know he will continue to be a great asset to our caucus and a great resource to me moving forward."

Prior to Friday's election, Senator Higdon held the leadership position of Senate Majority Caucus Whip. A special election will be held in the near future to fill the newly vacant leadership post.

"I am happy for my good friend, Senator Jimmy Higdon, and look forward to continuing to serve with him in Senate leadership," Senate President Robert Stivers (R-Manchester) said. "Senator Higdon is experienced, knowledgeable, and possesses the necessary character skills needed to effectively serve as President Pro Tem, and I am confident he will do an exemplary job."

Senator Higdon was elected to the Kentucky Senate in 2009 during a special election after having previously served in the Kentucky House of Representatives since 2003. Senator Higdon was elected Majority Caucus Whip in 2014 and reelected in 2016. He represents the 14th Senate District, which encompasses Casey, Marion, Nelson, and Spencer counties, as well as a portion of Jefferson County.

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