Reducing Spending Forgotten, Tax Hikes on the Way
House Speaker Greg Stumbo seems to have decided that cuts to state spending is too hard, and has reverted to wishes and tax hikes to balance the state budget.
From Tom Loftus:
House Speaker Greg Stumbo said Sunday he is more hopeful the House can reduce or eliminate proposed cuts to state funding of higher education in the 2010-12 budget.
So if spending won't be cut, how's he going to balance the budget?
Stumbo repeated Sunday that the House will close what he called "some loopholes" in the state tax code.
"Closing loopholes" is almost always code for raising taxes...
A proposal he first mentioned last week was to suspend for two years a corporation's ability to carry forward past losses to offset current-year income for tax purposes. That remains in the House plan, he said. Stumbo has said this move would generate an anticipated $182 million over the upcoming budget period.
As we pointed out in our newsletter, the $184 million expected from businesses is not only a tax hike, but because it is a postponement of the ability to write off losses, it is targeted directly at small businesses that are struggling!
The Kentucky Chamber agrees:
The Kentucky Chamber of Commerce sent Stumbo a letter on Friday opposing the move, saying it would "have a negative impact on Kentucky companies at a time when some are just starting to turn the corner."
What is it in the water in Frankfort, that always pulls the Kentucky House down the road to tax hikes?
Additionally, the shortfall will be met with a fantastic effort of wishful thinking and accounting trickery:
"We may shift some money around, but that's not a cut. There are better ways to do some things than what the governor has proposed with the same dollars," he said.
The magical speaker can spend the same amount of money on more things! Usually, this is a skill of someone who writes the contracts but doesn't write the checks...
