February 12, 2005

Legislative Update

Let me just quickly note that HB 278 is out of committee. This bill (Small Business Access Plan) would help small businesses offer health insurance with policies that are liberated from many state-mandated benefits that make insurance so expensive. I talked about this in the campaign, and so I'm happy to be a sponsor of this bill and excited about its possible passage.

Playing Politics - Power over Reason

I study all those bills/resolutions on which I'll be voting in committee or on the floor. I work to pass or defeat other bills in which we have an interest. On Friday last, I was sitting at my legislative desk in the House, having finished voting on all that had been posted for consideration. Then the Floor Leader rose to ask for a waiving of the rules to consider a new resolution. It was a Rules change that makes the majority even stronger. I hadn't seen the resolution, so I called it up on my computer screen. We had less than one minute to decide. I voted "Nay" but HR 104 was adopted 62-19.

The problem was that the majority leaders had previously agreed with the minority leaders that this resolution would not be considered until the next legislative day. They went back on their agreement. Maybe that's just politics; but it shines a caution light that the House leadership will emphasize power over reason. This state needs a budget, and we simply cannot allow politics to get in the way. I am still hopeful that a spirit of cooperation will prevail.

I also believe we need to modernize our tax code. I don't know a single representative who disagrees. I'm for lowering income taxes on everyone, and dropping the poor from the tax rolls. Much of the governor's tax modernization is great, but I'd like to see a few things change. One of them is the retail sales tax on alcohol.

Another Whiskey Rebellion

If you're the governor, looking for ways to get revenue, you might notice that nobody pays a sales tax on package beer or liquor. It's been that way since 1982, and you might think that was not right and so you'd bring down a sales tax on it. But here's why you shouldn't.

A retail store has to send in a form to the state every month telling how much they made in gross sales and include a check for the 6% sales tax on that gross amount. In the old days some retailers would buy a bunch of liquor product from a wholesaler, but then not declare their retail sales when it came that time of the month. (As Bo Bean would say, it ain't right, but it's so.) To solve this problem, HB 571 in 1982 changed it to where the sales tax is collected as the product is sold to the retailer. It is a 9% wholesale tax! In all, Kentucky taxes alcohol higher than any other state in America .

Now, I know that people who buy alcohol don't have to buy alcohol and so it's a voluntary tax. And I may be wrong, but I don't think that the imposition of this tax will hurt package liquor sales. However, I think that it would be unfair to the industry, and potentially harmful to Nelson, Bullitt, and Marion Counties . Plus, it just doesn't feel right to me. If we can't get this tax out of a committee's modernization plan, I'll propose a floor amendment so that the whole House can help me defeat it.

I'll continue to update you on things in your General Assembly. I can be reached here at home anytime, or through the toll-free message line in Frankfort at 1-800-372-7181. I'm here to help.