Sunday, December 21, 2003

Bill would raise, lower taxes

Proposes more for smoking, less for cars

By Patrick Crowley
The Cincinnati Enquirer

EDGEWOOD - When tax-related legislation is filed in Frankfort, the bills usually call for taxes to go either up or down.

Northern Kentucky lawmaker Jon Draud has put in a bill that does both.

Draud, an Edgewood Republican, filed legislation last week that would raise the state's cigarette tax from 3 cents to 75 cents a pack while at the same time slicing the motor vehicle tax by about a third.

With legislators facing a $700 million hole in the state budget, Draud says the cigarette tax increase would raise an estimated $280 million a year. The vehicle tax cut would reduce revenue to the state by about $80 million for a net gain of about $200 million.

"I think it's a win-win for legislators and for the people," Draud said. "We're raising taxes and cutting them at the same time. It's really the best of both worlds."

Draud has long pushed for an increase in the cigarette tax as way to not only raise revenue, but also reduce smoking - particularly among teens.

But he has run into resistance among lawmakers reluctant to raise taxes.

Motorists pay the vehicle tax annually when renewing their driver's license. Draud's bill only cuts the state's 30 percent portion of the tax because completely eliminating it would take millions of dollars away from local governments, schools and other public agencies and entities that rely on the tax.

"I don't want to take any money away from education," said Draud, the retired superintendent of the Ludlow schools and a Northern Kentucky University instructor. "But I at least want to reduce the vehicle tax. I hear more complaints from constituents about the tax than just about anything else. People hate it."

Gov. Ernie Fletcher has talked of a tax modernization plan that would address the state's entire tax structure and has not ruled out a cigarette tax increase as part of the overall plan.

But Fletcher and legislative leaders have recently said tax modernization might be too complex an issue to tackle in the 60-day legislative session that begins in January.

State Sen. Jack Westwood, R-Edgewood, said he would not be surprised if Fletcher bypasses his tax modernization plan in the legislative session and then calls lawmakers back to Frankfort for a special session in the spring or summer.

Westwood also said Draud's bill contains elements of what could be in Fletcher's tax plan. But lawmakers will probably not pass any tax-related bills until Fletcher unveils his overall plan, he said.



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