Friday, March 19, 2004

Fletcher plan hits wall in House

By Charles Wolfe
The Associated Press

FRANKFORT - A day after Gov. Ernie Fletcher's tax plan arrived in bill form, Democrats who control the House said it might not be put to a vote.

Speaker Jody Richards said it would be "virtually impossible" to get it passed in the time remaining - 10 business days left in the 2004 General Assembly - unless the Senate agreed to make the first move.

Speaker Pro Tem Larry Clark rejected the plan outright.

On the other side of the Capitol, Senate President David Williams said House leaders, primarily Richards, were being obstructionists. Williams said the Senate would pass Fletcher's bill if the House passed it largely intact.

Richards, D-Bowling Green, noted that the bill is 261 pages and would require much analysis. He said the Republican-controlled Senate could speed matters for the new Republican governor by adding his tax plan to the budget bill, which the Senate already has pending.

Fletcher, making a personal appeal to the House appropriations committee Tuesday night, said the legislature should waste no time changing the tax code to ease the load on businesses and individuals. "It is time that we act. It is past time," Fletcher said.

If Fletcher is serious, Richards said, "he will talk to his buddies in the Senate, and they'll get it down here."

"If they go through the normal process" of House hearings and votes, "it's virtually impossible," Richards told reporters.

Williams said Richards still would plead a lack of time if the Senate moved first. "We want to keep the pressure on them to keep the process moving," he said.

Fletcher said he was willing to call the General Assembly into special session. Clark said that was a good idea, provided it was after the November election. Richards said he was opposed to a special session because the General Assembly will reconvene in January.

Earlier Wednesday, as the House Appropriations and Revenue Committee continued hearings, Clark said he would not vote for a plan that raised some taxes - especially taxes on tobacco - but did not immediately generate more money for state services, including education and Medicaid.

Fletcher proposed a combination of tax cuts and tax increases, most notably a 26-cent increase in the excise tax on cigarettes - now 3 cents per pack - and excise taxes for the first time on other tobacco products, which now carry only the standard state sales tax.

The plan had to be "revenue neutral" at the outset, in keeping with Fletcher's campaign promise not to raise taxes. Fletcher has signed a no-tax pledge promoted by the conservative organization Americans for Tax Reform. Forty-eight of the General Assembly's 138 legislators signed the same pledge.

The administration theorizes that the state would eventually get more money because the plan, by reducing business taxes and income taxes, would stimulate economic growth.

Testifying to the appropriations committee, State Budget Director Brad Cowgill said Fletcher's plan "will raise revenue but will do it in a new way" by "trying to stimulate what has been a poor state into a position to be competitive with other states."

Clark, D-Louisville, told Cowgill he was having none of it.

"I have a hard time going back to my district and saying I voted to raise taxes (on tobacco) $168 million and we're going to give all that money to corporations and none to programs," Clark said.

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