Budget: Beshear Calls for Citizens' Help on Tax Hikes

FRANKFORT -- Democratic Governor Steve Beshear implored Kentuckians to “pressure” state legislators to support his proposals to both raise cigarette taxes and permit casino gambling during a morning rally at the state capital.

In the packed Capitol Rotunda, Beshear acknowledged his campaign pledge to not raise taxes was based on a misjudgment of economic conditions. Now, he argues measures to raise revenue are necessary to maintain state programs.

“During my campaign, I took the position to not raise taxes,” said Beshear. “The economy seemed to be in decent shape. However, when I arrived on the scene to be governor … I found that I inherited a financial mess.”

Beshear spoke at the rally in conjunction with representatives from anti-Tobacco groups who support the Governor’s proposed 70 cent hike in the state cigarette tax – an amount that would quadruple the current tax per pack.

The Democratically-controlled State House passed a budget last week incorporating a 25 cent increase, in addition to a sales tax increase on services such as armored cars and commercial laundering.

While Beshear praised the House for incorporating any tax hikes, he now says uncertainty over his other revenue raising measure – casino gaming – means a larger tax increase is needed.

Allowing casino gaming in Kentucky was one of Beshear’s principle proposals during last year’s gubernatorial race, but passage of the constitutional amendment to legalize gaming now appears stalled in the House. Even if the requisite 60 votes were rallied, voter approval via referendum would still be needed.

“The passage of [the casino gambling amendment] is very open to question. No one knows if we will be able to get that on the ballot,” said Beshear. “Now, a 25 cent increase is just not enough.”

Beshear – seeking to rally external pressure on the legislature - asked Wednedsay’s attendees to lobby their legislators on behalf of both the cigarette tax increase and the casino amendment.

“In a lot of quarters there is a willingness to do more, if we make sure everyone in the House and the Senate gets the message” he said. “So, I ask everyone today to redouble your efforts.”

Meeting with reporters after the rally, Beshear acknowledged there are several hurdles to clear for any of his revenue measures. The governor noted the newest vote counts show House support of the casino amendment sits “in the low 50s” while leaders from the Republican-led Senate recently expressed their unwillingness to support any tax increases.

Beshear said the convincing of swing votes in the House and Senate is ongoing, particularly as the budget is predicted to move to a conference committee next week.

Asked if such convincing entails the allocation of state projects to the districts of hesitant legislators, Beshear noted there was little to go around.

“In a budget like this, I don’t know that you’ve got any projects to offer,” said Beshear. “I think it requires very effective persuasion.”