FRANKFORT, Ky. (LEX 18) — In late 2021, Governor Andy Beshear came up with a proposal to reward essential employees for working throughout the pandemic.
"Something that you could call a reward or a hero bonus," he said.
The plan was for the legislature to use about $400 million from the American Rescue Plan for these bonuses. Discussions to figure out which essential workers would qualify took place, but then, it all came to a stop.
Republican leaders decided to go in another direction. Why? Senate President Robert Stivers told LEX 18 they wanted to make a change that would impact all workers.
So, Republicans pushed through income tax reform. They created a plan to reduce the individual income tax rate by one point and keep decreasing it over time until income tax is gone altogether.
"When you think about your personal income tax, you will be taxed less," explained Stivers.
"If you're making $40,000 a year and you're paying 5% income tax on that. You can extrapolate that out - that's going to be reduced," added Stivers. "Hopefully, two years from now, it'll be reduced more. So that 5% tax on $40,000, you'll be paying nothing here."
However, the Kentucky Center for Economic Policy says the tax cut is a "giveaway to the wealthy."
The group cites research that shows the tax cut "would give an average of $11,056 to the richest 1% of Kentuckians" while "the poorest 20% of Kentuckians will get $20 on average and middle-class Kentuckians will get $278."
Governor Andy Beshear says he's disappointed in the lack of hero bonuses. He says essential workers put a lot on the line during the pandemic and he believes they deserve to be rewarded for that.
"My goodness. We look at the last two years - especially, the scariest moments at the beginning when we were asking people to continue to go to work - when the virus at the beginning had almost a 10% mortality rate in some places. We didn't have treatments and you could bring it home to your family," said Beshear.
"They deserve those hero bonuses,' he added.
