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State senator: Food sales tax a 'deal breaker' if special session called

State Senator C.B. Embry, Jr.  (R-Morgantown)

State Sen. C.B. Embry said he won't consider a sales tax on some foods or drugs in Kentucky if that's an option offered by Gov. Matt Bevin in a possible special General Assembly session later this year.

Bevin has indicated he's considering a special session to look at pensions and tax reform.

Embry, R-Morgantown, and several other local lawmakers discussed the pending special session and the now-concluded regular short session in Frankfort at the Barren River Area Development District board meeting Wednesday in Bowling Green.

"It's the gorilla in the room," Embry said of the special session. He said a sales tax on some foods and drugs would impact those having the least ability to pay. "That would be a deal-breaker for me," he said.

Embry also said Bevin's tax plan may not be revenue-neutral, and "is expected to be controversial."

Revenue-neutral is lawmaker-speak for meaning the reforms don't bring in any more or any less revenue. Bevin poured more than $1 billion into the state pension shortfall last session and instituted cuts across state government. State officials believe the governor doesn't have the option of further state cuts this time around.

"The governor says everything is on the table," Embry told the BRADD board. Recent studies have shown the state's tax structure has lost its elasticity as the state's businesses shift from production to service sectors.

Embry reported that 797 bills were filed during the short session and 190 passed, the most he's seen in his legislative career that spans serving in the state House of Representatives and then the state Senate.

State Rep. Jim DeCesare, R-Bowling Green, said approved legislation increasing the weight limit for aluminum loads paid off Wednesday when a $1.3 billion new aluminum rolling mill was announced for Wurtland in Greenup County that will create 550 jobs with an average salary of $70,000 annually. The plant will be constructed between 2018 and 2020 and its construction is expected to create 1,000 jobs.

Craig Bouchard, chairman and chief executive officer of Braidy Industries Inc., said the rolling mill will locate near Ashland.

"This $1.3 billion investment will create enormous opportunity for people in the region, and would not have been possible without our recently passed right-to-work legislation," Bevin said Wednesday in a release.

Bevin asked state lawmakers for $15 million in borrowing authority and didn't name the company at the time. Braidy, in partnership with the state of Kentucky and the Ashland Alliance, will construct what is to be the country's first Greenfield aluminum rolling mill in over three decades, a press release said. The Kentucky Economic Development Finance Authority gave preliminary approval Wednesday for up to $10 million in tax incentives to Braidy if it meets job targets.

"Braidy Industries’ decision to locate in Eastern Kentucky has the potential to be as significant as any economic deal ever made in the history of Kentucky," Bevin said in the release.

The Braidy rolling mill will produce auto body sheet aluminum, plate and ultra-high strength alloys for the aerospace industry, and initially the facility will produce about 370,000 tons of aluminum per year, with opportunities to expand over time.

Tom Harned, executive director of the Logan Economic Alliance for Development, said Braidy Industries could benefit from Interstate 64's proximity and that could provide a link to Toyota in Georgetown, which recently announced its own $1 billion expansion.

"This is a new company with a new entrance into the automotive aluminum market. Logan Aluminum will get to supply all of them – we hope," Harned said.

DeCesare attributed those two business expansions in Kentucky plus the recent $1.2 billion Amazon expansion in northern Kentucky to new state laws approved by the GOP-controlled state legislature, pointing to right-to-work legislation and repeal of the state prevailing wage as key measures.

DeCesare said the recent "historic" session means, for example, two gyms recently bid in Warren County "saved taxpayers a couple of million dollars" with the prevailing wage provision lifted.

In other matters, State Sen. Whitney Westerfield, R-Hopkinsville, told the BRADD board he wants to re-introduce, for the third-consecutive legislative session in 2018, Marsy's Law, which would provide a constitutional right for crime victims, and state Rep. Jody Richards, D-Bowling Green, said the legislative action on state funding for the proposed military veterans facility for Bowling Green moves the project up the federal list for funding.

"Now we wait," Richards said.

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Date: 04-27-2017
By Charles A. Mason
Bowling Green Daily News
Kentucky Press News Service

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