House votes to lower individual income tax rates

The measure passed through the House Thursday on a 79-19 vote

FRANKFORT, Ky. (WTVQ) – Kentucky could see state individual tax rates lowered yet again.

The House voted Thursday on House Bill 1, which would reduce the individual income tax rate by another half percentage point, putting the rate at four percent by 2024.

It’s part of a long-standing GOP policy objective in Kentucky, and the bill follows up on last year’s efforts to reduce individual tax income rates.

The measure cleared the GOP-led House on a 79 to 19 vote Thursday, but not before a long debate, with Democrats arguing the tax cuts would deprive the state of funds to pay for state services, like education and public safety.

According to the Associated Press, last year’s legislation re-vamped Kentucky’s tax code, extending the state sales tax to more services. However, that money gained will still fall short of making up for the tax rate difference.

Still, Republican lawmakers argue the measure would help people across the state.

“Certainly it does take money out of state coffers, about $600 million this year, $1.2 billion in 2024, and we happen to believe its good policy to allow the tax payers to keep more of their hard earned money,” said House Speaker David Osborne (R-59).

Meanwhile, on the other side of the aisle, Democrats like Representative Ruth Ann Palumbo (D-76) questioned the fiscal responsibility of the measure in a committee Thursday:

“This bill hurts lower-income Kentuckians and helps the wealthier, higher-income Kentuckians. It is not sustainable. Future legislators will have to raise taxes, and we are not being fiscally responsible.”

Lawmakers will reconvene at noon on Friday before adjourning for an extended break until February 7th. Lawmakers will then meet until March 30th.

The Senate is expected to take up House Bill 1 when it reconvenes.