• G. Huddleston

2018 Legislative Review| March 2018

With noisy disputes raging in Frankfort this year over the state budget and pension reform, members of the Agribusiness Industry Network got an up-close and somewhat quieter look at the workings of the 2018 legislative session during a March 13 visit to the state capitol.



Noting the importance of transportation infrastructure to farmers and agribusinesses, Senate Ag Committee Chair Paul Hornback, R-Shelbyville said the concept would base fuel taxes on the cost of highway construction rather than the current formula tied to the wholesale price of gasoline. And it would place fees on electric and hybrid vehicles which use less fuel, or no fuel at all, but still drive on the roads and bridges.

Senate Ag Committee Chair Paul Hornback, R-Shelbyville, hosted the group, first with a private briefing on the status of various legislative proposals, then during a meeting of his committee, and capped off with a Q and A session over lunch in the Capitol Annex cafeteria.

Issues large and small were discussed and analyzed during the visit, from proposed budget levels for key agricultural and conservation programs, to bicycle safety on rural roads to future funding for highways and bridges.

Hornback described a proposal to update the existing fuel tax structure to account for funding reductions from greater fuel efficiency in vehicles as well as the potential loss of federal transportation credits.

Noting the importance of transportation infrastructure to farmers and agribusinesses, Hornback said the concept would base fuel taxes on the cost of highway construction rather than the current formula tied to the wholesale price of gasoline. And it would place fees on electric and hybrid vehicles which use less fuel, or no fuel at all, but still drive on the roads and bridges.

Ag Development funds remain in the proposed budget, he said, warning however that at the time of the visit the outlines of the actual spending plan were still a work in progress. Preliminary figures in House and Senate versions ranged from $51 million to $78 million over the next two years, with the majority of the allocation going toward local farm improvement activities.

Increased funding for the Kentucky Expo Center will be key to that facility's future success, he told the group. A number of the buildings there are in need of repairs and renovation including Freedom Hall, the West Wing and Newmarket Hall. Replacement of the old stadium with a new agricultural complex and construction of a new hotel at Gate 1 are also on the wish list of fair board officials.

Linda Brock reported that attendees at a recent Kosair Shrine Circus in Broadbent Arena complained about rainwater leaking on them during one of the performances.

Hornback said that the future of the pension reform bill was, at that time, impossible to predict. The proposal had already sparked animated demonstrations and vocal opposition among teachers and other state workers.

A version of reform did eventually win approval in the House and Senate on Thursday March 29, after legislative leaders stripped out most if not all the proposed benefit reductions for current employees and retirees. That seemed to clear the path for approval of a companion measure to ease the burden of higher pension contributions from local governments by phasing the increases over several years.

The following Monday a compromise budget and tax reform measure was passed by lawmakers. That legislation imposed sales taxes on a variety of services and reduced an income tax exemption on retirement income, but also lowered the top overall income tax rate from 6 percent to 5 percent.

The added revenue from the bill restored some funding for education and helped pay for the increased allocations for state pension payments.

Gov. Matt Bevin criticized the bill, voicing concerns that it lacks "basic standards of fiscal responsibility," but giving no indication if he will veto parts of the measure.

House and Senate leaders have indicated they will use the session's final day April 14 to consider overriding any vetoes the governor might make.


Gary Huddleston | AIN Chairman

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