FRANKFORT — Any effort by the General Assembly to move toward tax reform or modernization has been set back a few weeks and is largely dependent on what happens with other pressing issues.

        While the subcommittee on tax policy issues had hoped to issue its final report before the end of the year, the illness of its primary consultant delayed some work and the interest in the issue seems to have cooled from even its lukewarm start.

        Rep. Harry Moberly, D-Richmond, said delays are not a problem because the whole issue of tax reform was not going to come until later in the 2002 legislative session, after the House and Senate considered their differences and issues such as redistricting and the budget became more settled.

        Rep. Moberly and Sen. Richie Sanders, R-Franklin, the co-chairmen of the subcommittee, are not even sure what will be in any final report.

        A report could include options for changes in Kentucky's tax system, or perhaps some recommendations. It almost certainly will include the issue of “What are the consequences of no action in some of these areas?” Rep. Moberly said.

        William Fox, a University of Tennessee economist and chief consultant for the subcommittee, said recent history shows that Kentucky's tax system is not keeping up with the economy. Thus, as incomes and activity rise, the state's taxes do not. Mr. Fox said state government cannot sustain such a course. Eventually, taxes would have to be raised to make up the difference.

        Mr. Fox underwent heart bypass surgery about six weeks ago and has not been able to meet the year-end report deadline of the subcommittee. Mr. Fox said after a meeting Thursday that he did not know what form his final report might take.

        In previous meetings, Mr. Fox has outlined some of the issues raised by Kentucky's tax system, which he said relies heavily on income taxes and is characterized by relatively high rates on relatively smaller groups of taxpayers.

        Ideally, Mr. Fox said, a tax system would have lower rates that are more broadly applied. And, most important, would keep up with the economy. “The thing I'm most concerned about is your poor revenue growth,” Mr. Fox told the subcommittee.

        While Mr. Fox has been charged with researching the economic aspects of tax reform, legislators said they must face some political realities.

        Kentucky's cigarette tax, at 3 cents per pack and the second lowest in the nation, is a good example of the confluence of economics and politics.

        Mr. Fox said a cigarette tax increase would not hurt Kentucky competitively and would raise new money. On the other hand, cigarette tax receipts are not likely to grow.

        It makes no difference anyway, Rep. Moberly said, because a cigarette tax increase cannot pass the legislature.

        Rep. Moberly said Mr. Fox now could complete his work by later in January, with the subcommittee making its own report sometime later. In the meantime, legislative cooperation on other tricky issues could determine the fate of tax reform.

Two join Vienna Boys Choir
Road crews caught by surprise
Chill thrills skiing crowd
Cold weather packs homeless shelters to capacity
Motorcycle cop retires as a roll model
Church that serves all ethnic groups has New Year's service
Drees sues city over permits' cost
Gift theft suspect jailed
Ohio among slowest-growing states
Schuler seeks Finan seat
Tristate A.M. Report
White men prone to suicide
HOWARD: Some Good News
WELLS: Another assault
Traveling principal learned about Ukraine
Man charged with sodomy eligible for state compensation
Service for world peace unites faiths
Tax reform put on pause