Ball is in General Assembly’s court to stop higher gas taxes

Editor’s note: The Bluegrass Beacon is a weekly syndicated newspaper column posted on the Bluegrass Institute’s website after appearing in publications statewide.

In recent weeks, leaders of the Kentucky General Assembly have been lowering expectations for the session that starts in January.

In fact, “lower your expectations” was a direct quote from Senate Majority Leader Damon Thayer, R-Georgetown, to a room full of lobbyists at a Kentucky Chamber of Commerce legislative preview last month. That Thayer’s exhortation was directed at the lobbying corps congregating at a Chamber-sponsored event tells Kentuckians a lot about how Frankfort works.

The General Assembly always has an appetite to do more. Why else would they have put forward a referendum to become a year-round body? Thankfully, the voters had other ideas about giving the legislature more time to legislate.

Appearing with Thayer, House Majority Leader Steven Rudy, R-Paducah, said one of the first votes of the session will be to reduce the state’s income tax rate another half-percentage point to 4%.

What Gov. Andy Beshear does with that bill when it arrives on his desk will be notable. Beshear vetoed House Bill 8, which put the state on a path to methodically reduce the income tax, saying the legislation “threatens Kentucky’s economic future.”

Beshear is running for re-election and isn’t known for letting principles trump his political ambitions. He realizes the legislature’s Republican super-majorities would relish overriding a veto. My bet is he’ll sign the bill – or let it become law without his signature.

Over the summer, Beshear stopped an automatic hike in Kentucky’s motor fuels tax, garnering a ton of good press. A mid-January expiration date on his executive action puts the ball in the General Assembly’s court.

In response to Beshear’s move, Senate President Robert Stivers, R-Manchester, called the governor’s action “illegal” and said “it will only save residents 2-cents-per-gallon.”  Before the 2022 session, Stivers expressed support for raising the gas tax as part of tax reform. That idea went nowhere with inflation already driving energy prices sky high.

Still, Frankfort is always motivated to shovel more government spending to favored constituencies. Stivers could deliver simply by preventing a vote to stop a gas tax increase.

He’d be handing the governor another opportunity to grab the headlines. However, during his time in Beshear’s cabinet, Transportation Secretary Jim Gray has repeatedly said he’s in favor of raising taxes on Kentucky’s drivers. And, road contractors are a key source of campaign contributions. So, it’s possible Beshear would prefer the tax adjust itself to that industry’s benefit, at least if it happened quietly.

The Chamber of Commerce opposes “proposals to temporarily suspend or reduce taxes on fuel.” They argue “such measures provide minimal financial relief to motorists and businesses.” I’m pretty sure the chamber doesn’t ask many small business owners, especially from rural Kentucky, to weigh in before speaking on their behalf about what impact higher taxes have on their ability to provide for their families.

The General Assembly should enact an 18-month freeze of the gas tax, providing time for the broken formula to be overhauled. Putting the issue in the hands of Sen. Chris McDaniel, R-Ryland Heights, and Rep. Jason Petrie, R-Elkton, chairs of their respective chambers’ Appropriations and Revenue committees, would give taxpayers a shot at balancing the gas tax crowd’s influence over the outcome.

Almost every session ends with a smorgasbord of tax changes sought by special interests. Here’s how it works: the Senate holds a bill that originated in the House, rewrites it, passes it, then sends it to the House to sign off.

Rank-and-file members should insist on having enough time to consider legislation before casting votes on the floor.

One bad vote could be all it takes to invite a primary challenger. Telling voters you didn’t know what was in a bill because you couldn’t take it home overnight to read it probably won’t be a winning message.

Andrew McNeill is the former Kentucky deputy state budget director and a visiting policy fellow at the Bluegrass Institute for Public Policy Solutions. Reach him at amcneill@freedomkentucky.com and @bipps on Twitter.