State budget for 2011-2012, transportation budget and road plan approved before deadline
The special session adjourned May 29, passing all but one of the bills included in Governor Beshear’s legislative call. The Legislature passed a state budget, unemployment insurance reform and a state road plan and transportation budget. Legislation that would have expanded alcoholic beverage sampling opportunities did not resurface after it was defeated in the House.
Three major victories in the final budget for business were the unemployment insurance reforms and the defeat of further acceleration of state sales tax payments, as well as the defeat of the suspension of the net operating loss carry forward, the latter two of which did not show up in the special session.
The current budget would have expired at the end of June. Lawmakers passed HB 1, a $17.1 billion state budget for the next two fiscal years, alleviating the possibility of a government shutdown. The budget levies 3.5 percent spending cuts in the first fiscal year and an additional one percent in fiscal year 2012 that will be felt across state government, in expectation of a $1.5 billion shortfall in revenue.
Quick Overview of HB 1
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As a companion bill to the budget, the legislature also passed HB 2, a revenue measure which included a number of employer tax credits. These measures, supported by the Kentucky Chamber, included the following:
- A new markets tax credit to spur revitalization efforts in low-income and impoverished communities
- An acceleration of the small business tax credit
- A measure to help Toyota take advantage of the previously agreed-upon environmental credit to build the Camry Hybrid at the Georgetown plant.
Also passed was HB 5, the Chamber-supported unemployment insurance reform, which creates a new financial structure that will save employers an estimated $700 million over a decade. By increasing state contributions, employers will save a great deal of federal taxes and interest on the more than $800 million borrowed from the federal government. It makes modest reductions in the wage replacement rate to add long-term costs savings to the program. Kentucky’s current system has been out of balance for nearly a decade, paying out more in benefits than it had taken in. This plan is a huge step toward returning the system to solvency and allowing the reduction of employer tax rates.
Agreement was not reached on two measures to help Kentucky’s signature bourbon industry. A tax credit designed to take effect after this budget cycle and an important marketing tool to allow sampling of their products were passed by the Senate. The sampling bill failed in the House by a vote of 43-51. The House refused to concur by voice vote with the Senate amendment creating the tax credit.
Source: KY State Chamber’s Frankfort Inside Out
- Vienna Philharmonic Orchestra will perform Sept. 27 at the Norton Center. Tickets for the concert may be purchased by calling the Norton Center box office at (859) 236-4692 or toll-free, (877) 448-7469. The premium ticket price, which includes the pre-concert dinner, is $375. There is also a $275 ticket still available. We believe the $150 and $100 tickets may be sold out.
- Danville City Hall operations have now resumed at the NEW city hall building on Main Street.
- The Garden Club of Danville celebrates The Great American Brass Band Festival with "Strike Up the Band," a Standard Flower Show featuring both horticulture and design. Free and open to the public. June 4, 1 - 6 pm & June 5, 10 am - 5 pm. The Community Arts Center, 401 West Main Street, Danville, KY