Legislative Tax Expenditures Task Force

Provided by Mike Helton

The Joint House and Senate Legislative Tax Expenditures Task Force met for the first time this afternoon.  The group is co-chaired by Rep. Ken Fleming of Louisville and Senator Chris McDaniel of Northern Kentucky. McDaniel is also Chair of the Senate Appropriations and Revenue Committee.  We will be keeping a close watch on the activities of the Task Force because it could develop into a forum for more comprehensive tax reform.

The Task Force was created in House Bill 200, the state's biennial Budget this past session. The group was appointed by House Speaker Pro Tem David Osborne and President Robert Stivers  to review, examine and analyze all tax expenditures. Tax expenditures are exemptions from the state tax code and are compiled once per year and published for purposes of tax policy planning and for policymakers as tax policy is considered. The memo creating the Task force is available HERE and the members of the House and Senate are identified.

Today's initial meeting was for educating members on the various exemptions.  Two of the State's Deputy Budget Directors and economists testified with a power point that is available HERE. They gave an overview of the process in identifying and gathering data to compile the State Tax Expenditure Document including what an expenditure is and how they estimate annual costs for each expenditure.  The estimating process is similar to the Consensus Forecast Group estimate used to craft the biennial budget. 

Revenue Commissioner Dan Bork testified on the interaction of the Department of Revenue with the State Budget office in sharing the data used to compile the expenditure reports.  He went into great detail explaining the confidential protections Revenue employs for protection and for complying with federal IRS confidentiality rules. Commissioner Bork's presentation is also available HERE. 

The other presentations were on the film industry's incentives that have received significant debate in the General Assembly and other Economic Development incentives.