Now, on the second day of Kentucky's legislative session, lawmakers on the House budget panel voted to once again lower the state income tax.

As our June Laslo reports in tonight's legislative update.

The tax cut is set to move quickly in the Republican controlled General Assembly.

The priority bill, House Bill one, would lower the income tax by half a percentage point from 4% to 3.5% this time next year.

Kentucky Republicans want to emulate other states like neighboring Tennessee that have gotten to zero income tax.

You can say reasonable minds disagree, but there's a good amount of support for the theory that as that income tax rate becomes much more competitive with other states, then there is reason for people to stay here as well as locate here fresh population as well as economic growth.

That encourages the same because of companies not having to pay and employers not to have to pay the tax to get the same wage to their employees that they would in other locations.

There are a lot more things, but those are the primary drivers of what's going on.

Lawmakers decided to gradually reduce the income tax in 2022.

A progressive think tank and Kentucky says that move has cost the state billions of dollars.

Before these cuts began, the income tax generated 40% of general fund revenue, and with this cut, it will have been reduced by 30%.

Another cut would cost $718 million a year.

Once fully phased in for a total of $2.2 billion in annual loss revenue from the three half point cuts, an amount that exceeds what Kentucky spends on base K-12 seek funding, and as well as being more than what we spend on all of higher education, behavioral health and child care combined.

Yay!

Votes came from all Republicans on the House Appropriations and Revenue Committee.

Democrats passed on the measure.

I don't see any reason to vote no on this bill yet, other than not really being 100% agreement on this entire model of of going to where we're going, because I feel like it benefits higher income people at the expense of very lower income people.

And I'm not going to get into that right now, obviously.

But I do want to look at data a little more.

If House Bill one moves steady, it could get approval on the House floor and head to the Senate by the end of the week.

For Kentucky Edition, I'm June Leffler.

Thank you, June.

And that vote is expected in the House tomorrow.