WMKY

Bevin Takes Red Pen To Budget, Tax Reform

Apr 10, 2018
Originally published on April 9, 2018 5:48 pm

Kentucky Gov. Matt Bevin has vetoed the state budget and a hastily-passed tax overhaul approved by the GOP-led House and Senate – a decision has pit the governor against high-ranking members of his own party.

Bevin’s Monday morning veto announcement flipped the script in Frankfort, leaving Republican leaders to defend the current two-year spending plan and accompanying revenue bill without any help from the top. In a 40-minute press conference, the governor took the authors of the biennial budget to task for boosting spending by $600 million over his proposal and delivering economic blueprints that are not, in his words, “structurally balanced.”

"Sure people want us to (spend more). Sure, it feels good. Sure, it quiets people down," Bevin told reporters. "But the reality is the money is not there and we're kicking the can down the road."

Democrats were swift to pounce on the intra-party feud, tweeting support for scrapping bills they say were crafted in secret and rushed through without proper input from the minority party and stakeholders. State Democratic Party chair Ben Self said he agrees with the vetoes, but for “different reasons.”

Party leaders in both chambers released a joint statement, saying the vetoes "confirm the House and Senate Democrats’ concerns that the budget and revenue plan are wrong for Kentucky and irresponsible.  That is especially true of the revenue measure, which shifts the tax burden to 95 percent of working families while lowering taxes for corporations and the richest five percent." 

Meanwhile, GOP leaders labeled the governor’s interpretation of the budget and revenue bills “misguided” and called for a meeting before Bevin formally vetoed the measures.

Senate President Robert Stivers and House Speaker Pro Tem Davis Osborne said they are "comfortable with LRC staff revenue projections. To our knowledge, the Governor has had no discussions with any legislators on the details of this budget and what he might consider to be a shortfall."

To Override Or Not To Override

Attention now turns back to the Kentucky House and Senate, where lawmakers have the option to override the vetoes. Yet the vote count could prove problematic for the tax bill.

The two-year state budget passed with a comfortable margin in both Republican-led chambers and could be poised to survive the governor’s veto. But the bill creating a flat 5 percent income tax rate and tacking sales tax onto more than a dozen services might be in trouble. That measure barely won passage in the Senate on a 20-18 vote and a 51-44 vote in the House.

On those two fronts, Gov. Bevin urged lawmakers to go back to the drawing board.

"They could, if they wanted to override it. I don't know why they would," the governor said. "They don't balance. They come up short."

That statement echoes an assessment by the state budget director saying the revenue bill is off by at least $50 million.

But so far leaders in Bevin’s own party are standing behind the budget and tax bills. To erase the vetoes, the party needs simple majorities in both chambers.

Teacher Reaction

Bevin is also advising teachers against following the lead of educators in Oklahoma and West Virginia who have mobilized walkouts in recent weeks.

Teachers and state workers have kept a steady drumbeat against Senate Bill 151, calling on the governor to veto the pension reform bill that shifts new hires out of traditional pensions and increases the amount of time current teachers need to work before becoming eligible for full retirement benefits.  

The governor described the bill as a “good first step” while acknowledging it does little to relieve the state’s tens of billions in unfunded liabilities. He did not comment on whether he plans to veto the measure.

Asked whether Monday’s announcement could further inflame groups who have demonstrated at the Capitol, Bevin responded that it's "illegal for them to strike in this state. I would not advise that... I think that would be a mistake," adding that the Kentucky Education Association has been "a problem."

Explaining his vetoes of the budget and revenue bills, Bevin said he was looking out for the taxpayers and job creators who are paying for them.

"They weren't here protesting. They're working. They're paying taxes. They didn't have the time and ability, but now that it's out they're looking at it, and boy, we're hearing from them," the governor answered.

While the Kentucky Education Commission has not called on teachers to hold more sick-outs, the Jefferson County Teachers Association s encouraging teachers to take a personal day this Friday in protest of Bevin's vetoes.

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