A charter school funding bill that the Bluegrass Institute has been consulting on for several years was finally filed this week, the ninth of the 2022 legislative session. House Majority Whip Chad McCoy, R-Bardstown, filed House Bill 9 to provide a funding mechanism for public charters. Though Kentucky legalized charter schools five years ago, lack of funding has prevented any from opening in the Bluegrass State. McCoy’s legislation would allow SEEK dollars that flow from the state to local districts to follow the child to a public charter school district. The bill also expands allowable authorizers of charter schools and creates a new statewide commission as both an authorizer and an appeals board for denied applicants. It also includes a provision that requires local board approval for public charters in local school districts with fewer than 5,000 enrolled students.

This week, tax reform sailed through the state House. About a week was after its introduction, House Bill 8, a robust attempt at positive tax reform, made its way through the House and is on its way to the Senate. The legislation reduces the individual income tax rate from 5% to 4% beginning in 2023 and has an automatic revenue triggering mechanism that would continue lowering income tax rates until the income tax is eventually eliminated. While it doesn’t add taxes to necessities like groceries or utilities, it does extend the state sales tax to some goods and services not currently subject to the tax such as Uber rides, photography services or cosmetic surgery. 

The Senate passed its own tax reform bill that provides an income tax credit of up to $500 per individual and $1000 per joint filing for all residents who paid state individual income taxes for the year 2020.

Also, a bill to provide permanent relief from inflated motor vehicle taxes is on its way to the governor’s desk. The bill requires the Kentucky Department of Revenue to determine car values using last year’s values rather than the inflated ones caused by car part shortages. It also requires motor vehicle taxes to be assessed at the average trade-in value and not clean trade-in value.

Ignoring Kentucky law, Gov. Steve Beshear’s administration began using the clean trade-in value which fails to take into account the actual condition of the car. Along with continuing this practice, Gov. Andy Beshear sent a letter late last year notifying county officials that 2022 vehicle valuations would go up about 40%. House and Senate members excoriated him for sending the letter rather than using his authority to address the issue. He responded by issuing an executive order that takes action similar to that in the General Assembly’s bill. You can read more about the need for action in a recent Bluegrass Beacon column by BIPPS CEO Jim Waters.

A controversial unemployment insurance bill has passed the House and Senate despite fierce pushback from some of Kentucky’s rural legislators. It addresses the difficulty employers have had in getting folks back to work after Beshear essentially shut down the economy over growing COVID cases. The state’s current unemployment practices coupled with the federal government offering the state’s unemployed an extra $300 weekly has made unemployment more profitable, or at least more attractive, to some, leaving employers short-handed.

The bill bases the number of weeks an individual can obtain unemployment checks upon the state’s average unemployment rate at the time of his or her application for benefits, to a maximum of 24 weeks. Opponents argued that this practice would hurt rural individuals because those regions have not bounced back from the COVID economy as quickly as urban areas.

The House also passed HB 243 and HB 244 to fund the Legislative and Judicial branches of government, respectively. Both are essentially a continuation of their current budgets but do include some staffing pay increases.

The legislative update is comprised by Sarah May Durand, director of government affairs for the Bluegrass Institute for Public Policy Solutions. She can be reached at sarahmaydurand@freedomkentucky.com.