FRANKFORT – With the stroke of a pen Gov. Andy Beshear, D-Kentucky, slashed vehicle taxes and some Republican hopes on Wednesday.
With an executive order, Beshear effectively issued an Uno Reverse Card, immediately cutting vehicle property taxes caused by rising used car values, increases that Republicans were blaming on him. The move side-lined Republican legislation also aimed at freezing vehicle values.
Under the order, Beshear will freeze the vehicle property values at the same rate they were valued before the supply chain issue. The order went into effect immediately and will stay in effect for two years. Before signing the order, Beshear told reporters he does not believe it is under his authority to do so, but the Senate issued a resolution that he thinks changes that authority.
“I will tell you I think under Kentucky law it is my belief that the General Assembly is the one that sets tax policy, it is the one that sets how you determine tax policy on motor vehicles and other things, but for the first time last week the Senate passed a joint resolution that opposed to saying I do not have executive authority, which we’ve seen a lot of these past couple of years, they say I do have the power to do this,” he said.
“If the legislature thinks I have the power to help Kentuckians you bet I’m gonna do it.”
Republicans in the General Assembly are also set up to work tax reform into their version of the two-year budget, and Beshear is throwing a wrench in that action as well.
During his press conference Beshear acknowledged “significant inflation” and announced House Minority Whip Rep. Angie Hatton, D-Whitesburg would be filing legislation to temporarily drop sales tax from 6 percent to 5 percent from July 1, 2022, through June 30, 2023.
Beshear warned that lawmakers in Frankfort using the term “comprehensive tax reform” meant the GOP is eyeing a raise to the sales tax to decrease corporate and income tax.
“Why would people in midst of the highest inflation in decades want to put in a reform that makes things cost more that makes people struggle even more,” Beshear asked.
“Our families don’t need partisan reform they need relief.”
“I’m proud to sponsor this legislation, because Kentuckians deserve this relief and, during a time of record revenues, the state can afford to provide it,” said Rep. Angie Hatton. “I want to thank Gov. Beshear for taking quick action to lower our vehicle property taxes and for backing my legislation to temporarily cut our sales tax for a year. These moves would benefit all of us, but there is no doubt they are desperately needed in regions like mine in Eastern Kentucky, which has had to do more with less for so long that there’s just not any more to give.”