LRC News Releases
Senate advances income tax cut bill
Sen. Christian McDaniel, R-Ryland Heights, speaks on House Bill 1 during Tuesday’s floor proceedings in the Senate. The measure, which would reduce the state income tax rate, received Senate approval. A high-resolution photo can be found here
FRANKFORT — A measure to cut the income tax rate in Kentucky – House Bill 1 – was the first bill in 2025 to gain Senate approval.
With a 34-3 vote on Tuesday, the Senate approved the measure that would reduce the state income tax rate from 4% to 3.5% beginning Jan. 1, 2026. The House approved the bill in early January by a 90-7 vote and it now heads to the governor.
Sen. Christian McDaniel, R-Ryland Heights, and chair of the Senate Appropriations and Revenue Committee, said the general assembly created certain “triggers” several years ago to allow for the gradual lowering of the Kentucky income tax. The triggers require state coffers to meet savings and surplus thresholds before the tax rate can be lowered.
“It’s been said that there are only two things in life that are certain: death and taxes,” McDaniel said. “…In the last seven years, we’ve added another thing that’s fairly certain, which is the general assembly is going to do everything in its power, and frequently with success, to lower your taxes. And that’s what House Bill 1 is all about.”
Sen. Aaron Reed, R-Shelbyville, voted for the bill, and said it’s part of a “journey” to reduce the state income tax rate to zero.
“Let’s tackle the root of the problem by controlling spending and empowering our citizens. This tax cut will boost our economy and put more money back in the pockets of Kentuckians,” he said. “I vote yes for growth, yes for fiscal responsibility and yes for the future of the prosperity of our great state.”
However, a few lawmakers cited concerns with the plan during debate on the chamber floor.
Sen. Karen Berg, D-Louisville, voted against the measure. She acknowledged that the bill is popular, but said it is “putting way too many apples in a basket we can’t get a hold of if we need.” She also said she’s concerned about risks with the bourbon industry in Kentucky and tariffs.
“Obviously, these are things that sound very attractive to people, very attractive,” Berg said. “I may be socially liberal, but I am extremely fiscally conservative, and I honestly know that sound finances is that you pay your bills first. You make sure that you’re solvent, and you have enough money to cover exigencies as they come across.”
Sen. Cassie Chambers Armstrong, D-Louisville, also voted against the bill. She said she appreciates the intent of the legislation. However, she’s concerned that the people who are making the most money stand to receive the most benefits from the reduction.
“I also worry about cutting our revenues at a time of such economic uncertainty. We don’t know what tariffs, if any, might be coming. We don’t know what federal funds, if any, might be going away. We don’t know what impact, if any, that’s going to have on us here in this state,” she said.
But Sen. Michael J. Nemes, R-Shepherdsville, argued in favor, saying it’s a great thing for people to keep more of their money.
“They earned it. It’s their money, not ours. We think we know better what to do with their money than they do. I’m telling you, we do not,” he said.
Senate Minority Whip David Yates, D-Louisville, also voted for the bill, and said the measure shouldn’t have anything to do with partisanship.
“I tried to talk to our nonbiased economic advisers about what would happen in going from a 4% to a 3.5% in our climate today is still safe. I do have fears of the future and I know how hard it is in order to reverse something like this,” he said.
The Senate is adjourned until Wednesday at 2 p.m.
This Week at the State Capitol
In between bouts of winter weather, the Kentucky General Assembly convened the 2025 legislative session and moved a tax reform bill close to final passage this week before gaveling out on Friday A high-resolution photo can be found here
FRANKFORT — Kentucky lawmakers spent the first week of the 2025 legislative session electing leaders, adopting rules for the chambers, and advancing a high-priority bill on tax reform close to the finish line.
Friday marked day four of this year’s short, 30-day session, and winter weather hasn’t hampered the action in Frankfort. Legislators have filed more than 200 bills since the chambers gaveled into session on Tuesday.
The proposals touch everything from education and crime to more specific topics like water fluoridation, and they offer a glimpse of the issues lawmakers might look to tackle in the coming months.
Majority lawmakers in both chambers have been signaling for weeks that tax reform would receive focus early in the session, and that proposal – House Bill 1 – was the only measure to begin moving this week.
The legislation is part of a multi-year effort to gradually reduce and eliminate Kentucky’s income tax – so long as the state continues to meet certain revenue thresholds.
HB 1 would cut the state income tax rate from 4% to 3.5% starting in 2026. It cleared the House Appropriations and Revenue Committee on Wednesday and advanced off the House floor Thursday with a 90-7 vote after proponents staved off nearly a dozen floor amendments.
During the hour-long debate, supporters said the change will encourage more growth and development in Kentucky while helping ease the burden on taxpayers. Critics, however, raised concerns that it will mostly benefit high earners and rob the state coffers of important revenue.
The Senate received the bill late Thursday, and the Senate Appropriations and Revenue Committee took up the measure Friday morning, voting 11-0 to send HB 1 to the chamber floor for consideration during Part II of the session.
In addition to the tax discussion, the House and Senate welcomed a new class of legislators this week. Twenty-two new members were sworn into the General Assembly on Tuesday, including 16 in the House and six in the Senate.
Both chambers also saw a handful of leadership changes.
In the House, Rep. Pamela Stevenson, D-Louisville, will now serve as minority floor leader; Rep. Al Gentry, D-Louisville, will serve as minority caucus chair; and Rep. Lindsey Burke, D-Lexington, will serve as minority whip.
In the Senate, Sen. Max Wise, R-Campbellsville, was elected as majority floor leader; and Sen. Robby Mills, R-Henderson, will serve as majority caucus chair.
Other leadership roles remained unchanged from last year.
Under the state constitution, the Kentucky General Assembly convenes in short sessions during odd-numbered years. The calendar calls for four session days in January. Then the chambers gavel out until Part II begins in February.
This year, lawmakers are scheduled to reconvene on Feb. 4 and gavel out sine die on March 28.
Kentuckians can track the action through the Legislative Record webpage, which allows users to read bills and follow their progression through the chambers.
Citizens can also share their views on issues with lawmakers by calling the General Assembly’s toll-free message line at 1-800-372-7181.
Income tax cut bill on the move
Rep. Jason Petrie, R-Elkton, speaks on House Bill 1, which would reduce the state income tax to 3.5% in 2026, on the House floor on Thursday A high-resolution photo can be found here
FRANKFORT — House Bill 1 became the first bill to advance off the House floor in 2025 on Thursday.
Sponsored by Rep. Jason Petrie, R-Elkton, HB 1 would reduce the state income tax rate from 4% to 3.5% beginning Jan. 1, 2026.
Petrie said the general assembly’s journey to reducing the state income tax began in 2018, but picked up steam in 2022 with House Bill 8. HB 8 established a “trigger” system, which allows the legislature to reduce the income tax rate by either a half or a full percentage point if state revenues reach certain levels.
“It is before this body again, per formula, as a good, methodical, thoughtful, cautious approach to reducing the individual income tax rate to zero over time, but not so fast we hurt ourselves, or – more importantly – our constituents,” Petrie said.
Eleven amendments were filed to make changes to HB 1 on the floor. Rep. Steven Doan, R-Erlanger, attempted to amend HB 1 to reduce the income tax to 3% in 2025 and bring it to zero by 2028.
“States like Texas, Tennessee and Florida have no individual income tax, which has been a significant draw for businesses and entrepreneurs seeking to minimize their tax burden,” Doan said. “By aligning with these states, Kentucky will be poised to see an influx of new businesses and residents, stimulating economic growth.”
The House did not vote on the amendment after it was ruled unconstitutional by House Speaker David W. Osborne, R-Prospect. Petrie said reducing the income tax too quickly would lead to a “severe” budget deficit, which is against the Kentucky Constitution.
Rep. Adrielle Camuel, D-Lexington, also tried to amend HB 1. She suggested amending the bill to introduce a graduated income tax system, adding she has concerns over the future funding of public education under a consumption-based tax structure.
Beginning in 2026, individuals making less than $90,000 annually would be taxed at 3.5% under her proposal. Her amendment would also put individuals making $90,000 to $100,000 in net income to be taxed at 3.75% and individuals making more than $100,000 a year to be taxed at 4%.
“Amendment 8 will provide a larger budget revenue stream for Kentucky, fulfill the majority’s efforts to cut taxes for Kentuckians, and also give a greater tax cut and greater financial relief to the people who need it most,” Camuel said.
Petrie said he doesn’t support Camuel’s amendment because HB 1 is designed to reduce the tax burden for all Kentuckians.
Camuel’s amendment was not adopted.
Rep. Chad Aull, D-Lexington, was one of many lawmakers to speak on HB 1 during a more than an hour-long debate on the bill. He said he would be voting “yes” on the legislation, but he still has concerns.
“I wish the bill focused more on our working-class families, and was not drafted to disproportionally help those who have the most,” Aull said.
House Majority Whip Jason Nemes, R-Middletown, said he has seen the evolution of tax reform in Kentucky since he joined the general assembly in 2017 and it hasn’t happened “in a vacuum,” but with careful consideration and conservative budgeting practices.
“This is a conservative approach to a conservative goal,” Nemes said. “This is a long play, and that’s the reason we’re doing this: to help the individual taxpayer, and to grow the pie for all of our people, and we have done that.”
The House approved HB 1 by a 90-7 vote. It will now go before the Senate for consideration.
House committee approves income tax cut proposal
FRANKFORT — Kentuckians may see another state income tax cut next year.
The House Appropriations and Revenue Committee started the process of reducing the state income tax from 4% to 3.5% beginning Jan. 1, 2026, by approving House Bill 1 on Wednesday.
Committee Chair Rep. Jason Petrie, R-Elkton, said HB 1 is the next step in a process that began with House Bill 8 in 2022 to reduce the state income tax. Petrie is the primary sponsor of HB 1.
HB 8 established “triggers” that permit the general assembly to lower the state income tax rate by either a half or full percentage point once state revenues reach certain levels.
Rep. Tina Bojanowski, D-Louisville, asked Petrie what would happen if future projections indicate the general assembly should reverse the tax cut.
Petrie said there are several ways the legislature could address the issue.
“You would reverse it by statutory amendment modification, just like we’re doing in a different direction today,” Petrie said. “Or you would focus on budget, or you would focus on revenues and expenditures … those are three easy places to go.”
Jason Bailey, executive director for the Kentucky Center for Economic Policy, said Kentucky will face budgetary issues if cuts are made to the state income tax.
“A recent state forecast predicted revenues will decline by $213 million this year, and the state will face a shortfall,” Bailey said.
In continuing the discussion on HB 1, House Minority Caucus Chair Al Gentry, D-Louisville, asked Petrie about the state moving toward an all consumption-based tax structure and working toward becoming a zero-income tax state.
“What is the general reason for doing that? Is it trying to promote growth for people moving into the state?” Gentry asked.
Petrie said that there is evidence that supports the theory that a lower income tax will lead to population and economic growth.
“There’s a good amount of support for the theory that as the income tax becomes much more competitive with other states, there’s reason for people to stay here, as well as locate here, as well as economic growth,” Petrie said.
The committee approved HB 1 by a 17-0 vote with three members passing.
Gentry recorded a “pass” vote on HB 1 in committee, but said he may vote in favor of the legislation on the floor once he does more research.
“I don’t see any reason to vote ‘no’ on this bill yet other than not really being in 100% agreement on the entire model of going to where we’re going, because I feel like it benefits higher income people at the expense of lower income people,” Gentry said.
HB 1 will now go before the full House for consideration.
Stay connected to the General Assembly during the 2025 legislative session
Lawmakers are set to convene on Jan. 7 for the 2025 Regular Session of the Kentucky General Assembly.
FRANKFORT — State lawmakers are set to convene in Frankfort next week for the 2025 Regular Session of the Kentucky General Assembly, and Kentuckians have many ways to follow along with the action.
Kentuckians can use online resources to:
-- See the General Assembly’s daily schedule
-- Tune in to live coverage of legislative
meetings
-- Find information on their legislators
-- Contact lawmakers and offer feedback
-- Read bills and resolutions
-- Receive a notice when a bill advances
-- See how lawmakers voted on bills and
resolutions
-- View materials on committee topics and
testimony
-- Learn about the legislative process
All that and much more is available on the General Assembly Home Page: https://legislature.ky.gov/pages/index.aspx.
Following the General Assembly’s work often begins with a daily look at the Legislative Calendar: https://apps.legislature.ky.gov/LegislativeCalendar. The calendar shows which committees are meeting and when the Senate and House will convene.
The full 2025 session calendar and the 2025 schedules for standing committees, which are subject to change, are available on the Schedules and Calendars webpage: https://legislature.ky.gov/Schedules-Calendars/Pages/default.aspx The full 2025 standing committee schedule will also be available on the Schedules and Calendars webpage once it becomes available.
Livestreams of legislative action can be viewed through feeds provided by Kentucky Educational Television (KET) and the Legislative Research Commission (LRC).
KET livestreams all chamber proceedings and many committee meetings. LRC provides full coverage of all committee meetings on YouTube. For links to the livestreams, go to https://legislature.ky.gov/Public%20Services/PIO/Pages/Live-Streams.aspx.
You can find each lawmakers’ contact info, biographical info, committee assignments and sponsored legislation by clicking on the “Legislators” tab near the top of the General Assembly Home Page: https://legislature.ky.gov/Pages/index.aspx. You can also look up who represents your district.
The online Legislative Record ( https://legislature.ky.gov/Legislation/Pages/default.aspx) has information on every piece of legislation introduced in the Senate and House. You can read summaries, the full text of bills, resolutions, amendments and see exactly how far each piece of legislation has advanced in the process. Bills can be looked up according to bill number, sponsor or topic. If a bill has been voted on in a chamber, you can see how each lawmaker voted by clicking “Vote History” on a bill’s summary page.
Bill Watch, a bill tracking service provided through a partnership of Kentucky.gov and LRC, sends users email notifications each time the bills they are interested in take a step forward. To sign up for Bill Watch, go to https://kentucky.gov/services/pages/billwatch.aspx.
Information about legislative committees is available at https://legislature.ky.gov/Committees/Pages/default.aspx. To view materials such as info sheets, handouts and PowerPoint presentations that are compiled for lawmakers to review at committee meetings, click on the “Meeting Materials” tab on the left side of each committee’s page.
To share feedback on an issue with lawmakers, call the General Assembly’s Message Line at 1-800-372-7181. Kentuckians with hearing loss can use Kentucky Relay by dialing 7-1-1.
A Spanish language line for legislative information will be available throughout the General Assembly’s 2023 session by calling 1-866-840-6574.
To directly reach a lawmaker’s office, call 502-564-8100. An operator will transfer the call to the office of the lawmaker you want to reach.
If you have a question about the lawmaking process or legislative resources, the LRC Public Information can be reached by calling 502-564-8100 ext. 59105.