Some Kentuckians are closer to having more money in their pockets after the Kentucky Senate voted Monday to advance a bill that would provide state tax refunds. Senate Bill 194 would give a one-time tax rebate of up to $500 to single taxpayers and up to $1,000 to joint filers, not to exceed the amount of taxes they paid last year.
The money is available through billions in budget surplus funds in the current fiscal year.
The bill’s sponsor, Sen. Christian McDaniel, R-Taylor Mill, said that taxpayers are facing around $267 in additional expenses each month from the highest level of inflation in 40 years and that the rebate will help working Kentuckians cope with the costs.
“If you went grocery shopping this weekend, if you paid a utility bill, if you did any of the basics of life, you’re seeing inflation probably unlike most of us have ever seen in our adult lives,” he said.
McDaniel said all of the surplus money in the state’s budget was generated by working Kentuckians, and that lawmakers must consider who is best to decide how the money is spent.
The bill was approved 28-7 after nearly an hour of debate on the Senate floor.
Supporters largely argued that taxpayers need and deserve a refund during times of excess funding and that giving money back to Kentuckians would not hamper other projects in the budget – such as paying down pension debt.
Senate President Robert Stivers, R-Manchester, said there is enough money in state coffers to cover the legislation with plenty to spare for other objectives.
“I disagree with my colleagues who say rebate,” he said. “It’s refunding. It’s giving your money back to the people who paid it. And once we do this, we’ll still be sitting on $5 billion over the next 12 months to spend – $5 billion.”
Opponents, however, said such large spending decisions should be made in context of the state’s next biennial spending plan. They also criticized the bill for not providing rebates to Kentuckians who pay relatively little or no taxes like retirees or the working poor.
Senate Minority Floor Leader Morgan McGarvey, D-Louisville, said he’s not convinced offering the rebates as proposed would be the best thing to do and that the Senate first needs to hear details on the proposed budget that lawmakers are set to vote on later this session.
He also said money should be returned to more types of taxpayers.
“I heard someone say that this is simply returning the money to the people who paid it. I think we need to put one more word in that. It’s returning money to some of the people who paid it. The reality is even those people who don’t pay income tax are paying state taxes that come into our general fund,” McGarvey said.
The amended bill now heads to the House for consideration.