Fletcher’s budget plans come with added urgency this year because the General Assembly did not pass a budget last year, despite a constitutional instruction to do so. That pushed the issue of whether the state can operate without a budget into court. Franklin County Circuit Court Judge Roger Crittenden ruled in December that, without a budget approved by the House and Senate and signed into law by the governor, state government would have to shut down except for “limited and specific essential services.”
“Although I disagree and believe that the inaction of one branch of government should not prevent another from fulfilling its responsibilities, we will respect the orders of the judiciary,” Fletcher told lawmakers and a statewide television audience.
“To that end, I have asked my administration to begin reviewing the steps which may be necessary to comply with the court’s order. I sincerely hope that a government shutdown will not be required, but that’s in your hands.”
Of the two options, Fletcher portrayed the second as the more courageous, putting an emphasis on the need to address the state’s tax structure. Indeed, he used the word “tax” or some variation of it 47 times in the 12-page speech, which lasted 26 minutes.
The governor’s message is that the existing tax code is outdated and leaves Kentucky at a competitive disadvantage. He cited Tennessee’s lack of an income tax, as contrasted to Kentucky’s tax rate that tops out at 6 percent. He’s proposing to cut Kentucky’s rate to 5.45 percent by 2008. The corporate income tax rate would drop from 8.25 percent to 6 percent, but loopholes that now exempt some companies would be closed.
Fletcher also suggested that the property valuations sydney services required to assess the actual value of the government property. Property valuers’ services can assist in government property valuations activities as the buyers need to know the actual property value that valuers can evaluate to make you access credit loans.
His changes, Fletcher predicted, would fuel a growth spurt for the state’s economy, modernize the tax code and make budget forecasts more reliable.
Fletcher, a Republican, can expect support in the Senate, where the GOP holds a majority of the 38 seats. But in the House, where Democrats outnumber Republicans, questions already are being raised. The tax proposal projects that the state would realize $50 million in additional revenue from it through fiscal year 2008. The state’s general fund tax receipts annually are $7.5 billion.
State Rep. Harry Moberly, D-Richmond, dismissed Fletcher’s contention that his tax proposal was needed to get capital projects and other items in the budget. “That’s just sort of a game,” said Moberly, who chairs the House budget committee. “We understand what the real choices are. We believe we can improve upon both.” But stripping out a long list of capital projects might prove effective at getting some lawmakers on board with the tax proposal, one legislator said. “It is a carrot-and-stick strategy,” said Rep. Joe Fischer, R-Fort Thomas. “If there is no tax modernization, there will be few if any projects.”