Governor signs HB144, increasing vice taxes

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By The Staff

Gov. Steve Beshear signed a budget package Friday that he said protects funding for basic education, health care and public safety. The package approved Friday by the Kentucky Senate, and earlier this week by the House, includes some $150 million in additional spending cuts combined with a 30 cent increase in the cigarette tax and applies the state’s 6 percent sales tax to store sales of beer, wine and liquor. Under the package, the basic education funding formula would be preserved from any cuts, while higher education would only be cut 2 percent. Medicaid funding also would be preserved from further cuts as would significant areas of public safety. Most other state agencies would be cut 4 percent. The downturn in the economy resulted in over $430 million in cuts in the state budget last year.

Gov. Beshear acknowledged that the budget package adopted today is not perfect and he also said that he will need to work in the near future with legislative leaders on an approach to next year’s budget, which will likely involve an even larger shortfall. Yet, the governor said that the level of cooperation between the executive and legislative branches should be a model for future discussions and negotiations going forward.

“We know today’s action – as significant as it is and as important as it is for our children – is but a temporary solution,” the governor said. “But I’m convinced that if we maintain the level of commitment and the spirit of cooperation that we’ve demonstrated in recent weeks, next year’s mountain – no matter how steep – will be overcome.”