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State’s stimulus package will speed up economic recovery

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By Tom McKee

The General Assembly had two main goals when it convened the recent special legislative session that Governor Beshear had called: Overcome a billion-dollar budget deficit and help jumpstart our economy.

By the time legislators finished their work last Wednesday, there was considerable agreement that both had been accomplished.

Thanks in large part to the federal stimulus dollars Congress approved for the states in February, and a good plan from Governor Beshear that served as a starting point, the legislature was able to close the budget deficit without cutting classroom funding, postsecondary schools and Medicaid. Our public prosecutors and defenders, as well as our parks system, actually saw a slight increase.

While these decisions will help us get through a difficult year, our economic stimulus package should help to speed up the recovery. It contains many of the ideas that had been discussed in the House in recent months.

That includes our goal of exempting military pay from the state income tax. This not only recognizes the sacrifices our men and women in uniform have made, but it also should lure many families who may serve in Kentucky but prefer to live in other states. This legislation, which covers the National Guard and the Reserves, will be especially helpful to the Fort Campbell and Fort Knox areas.

Two other tax-relief programs will benefit those in the market for a new house or car. Over the next year, current home owners who are ready to move to a newly constructed home will be eligible for up to $5,000. This complements an incentive program for first-time buyers, and it should help clear out the inventory many homebuilders have.

The year-long program for new vehicle owners, meanwhile, will enable them to credit the value of their trade-in when determining how much sales tax they have to pay. Before this change, the buyer would have to pay the tax on the full price of the new vehicle, regardless of what he or she actually paid when factoring in the trade-in. This is something most states already allow. Both of these programs are capped at $25 million apiece.

There are several other noteworthy incentives in the legislation we adopted. For example, qualified small business owners are now eligible for breaks if they hire more workers and buy more equipment, and the Kentucky Speedway owners can receive help to pay for a track expansion if they land a NASCAR Sprint Cup race. Kentucky is also now in better position to land a next-generation battery factory that could employ up to 2,000 people in Hardin County.

Another new law that holds a lot of potential for the state sets up a process to pay for large transportation projects costing at least $500 million. As it is, our road fund has been hit especially hard because of the economy, and there simply would be no feasible way to build projects like the two Ohio River bridges in Louisville without the financing plan this bill puts in place. Now, these projects can move forward without harming other road projects across the state.

With our work now done, I want to say how much I appreciate the comments I received. It really made a difference, because there is no better way to help me represent the views of those I serve.

Although the legislature is no longer in session, our committees will continue to meet in the months ahead. If you would like to write to me about any state government issue, I can be reached at Room 332B, Capitol Annex, 702 Capitol Avenue, Frankfort, KY 40601.

You can also leave a message for me or for any legislator at 800-372-7181.  For the deaf or hard of hearing, the number is 800-896-0305.

I hope to hear from you soon.