Yesterday, the Senate A&R Committee approved two pieces of process-related legislation that could help create a better environment in the General Assembly to pass pro-growth legislation.
First is SB 5, a potential KEY VOTE for the KyCFG's 2012 Scorecard. SB 5 simply requires a 48-hour viewing period on any legislation that would raise taxes or appropriate funds.
The second is SB 1, which creates a task force instructed to review and recommend improvements to the Kentucky tax code. It specifies that any recommendation would be subject to an up or down vote in the House and the Senate without amendment.
The sponsors of SB 1, David Williams and Bob Leeper, should be commended for their leadership in creating this novel approach to attempt real reform. As Williams notes in a Herald-Leader report:
Williams said Beshear and the Democratic-controlled House, where a tax bill must originate, have not taken the lead on the issue. This bill would allow the Senate to push for tax reform.
Additionally, the instructions to the task force laid out in the bill are sound:
- Focus on the creation of jobs and enhancement of production capacity;
- Examine the tax and revenue structure based on its adequacy, equity, sustainability, predictability, and efficiency;
- Focus on the impact of the tax and revenue structure on the competitiveness of the Commonwealth and our ability to attract businesses and individuals to locate, live, work, and invest in the Commonwealth; and
- Place an emphasis on making the Commonwealth a low-taxed state;
That's a fair prescription for a more pro-growth tax code.
It is also great that the effort includes direction to examine not just state but local taxation as well:
Develop criteria for assessing the effectiveness of the current state and local tax and revenue system, as well as the systemic impact of any proposed changes affecting revenues.
Our only concern lies in the makeup of the task force. Five university economists, two CPAs, one PVA, and a tax attorney. While the task force is instructed to solicit advice from business associations, the associations and their advice are hardly adequate substitutes to the input real job creators should have. Kentucky business owners should be a part of the team, not simply offer advice through association lobbyists.
It will probably not matter. House Speaker Greg Stumbo says the proposal is D.O.A. in Kentucky's Good-Ol'-Boy House:
The panel will not include any legislators that can vote on the potential changes. For the legislature to approve a far-reaching overhaul of how the state generates revenue, legislators should be part of the process, Stumbo said.
"In the end, tax modernization is going to have to be decided by the members of these two chambers," Stumbo said. "I'm not for abdicating the authority or the responsibility, really, of the legislature."
We actually partially agree with the Speaker -- it would seem to us that the task force's recommendations would receive guidance and an improved chance of passage with the right legislators included on the panel.
So there's a test of Stumbo's leadership: will he commit to improving Kentucky's tax code, make a small amendment and move the legislation forward, or will he sit on his hands, keeping Kentucky on the same path we've always been on?