Democratic Gov. Andy Beshear has signed a Republican-sponsored bill that would cut the state’s income tax by another half a percentage point in 2024.
The measure comes as state revenues continue to outpace spending, leading to record budget surpluses in recent years. Instead of reinvesting in state services, Republican lawmakers, and now Beshear, have elected to leave more money in taxpayers’ pockets.
In a video message, Beshear said he would have preferred a cut to the state sales tax but that the bill would help Kentuckians struggling with higher prices.
“While there are some long-term repercussions, I have one bill in front of me, one bill about whether we can help our people in this time of high inflation,” he said.
The measure will cost about $316 million of the state’s $12 billion discretionary budget each year.
Nearly all Democrats voted against the measure as it made its way through the legislature, voicing worries that it would hobble the state’s ability to generate revenue, especially during a recession.
Republican Party of Kentucky spokesperson Sean Southard said Beshear, who is running for reelection this year, was taking credit for Republican policies.
“There’s an election this November. From his mishandling of our unemployment system, our Department of Juvenile Justice, his Team Kentucky Slush Fund, and the learning loss of our children, Andy knows he’s vulnerable to whoever wins the Republican primary for governor. It is a blatant political move, and Kentuckians will see through it,” Southard said.
Kentucky already reduced the income tax from 5% to 4.5% at the beginning of 2023. That came after lawmakers passed a bill in 2022 creating a pathway to lower the income tax every year, with the potential of totally eliminating the tax.
Beshear vetoed that measure, criticizing it for also expanding the sales tax to 35 services ranging from cosmetic surgery to parking. According to an official estimate, the income tax cut from last year alone will cost the state more than $1 billion per budget cycle.
