Police officers in Kentucky would be exempt from paying the state's 5 percent individual income tax under a House bill filed last week.
Rep. Ryan Dotson, R- Winchester, said his House Bill 141 is intended to make law enforcement a more attractive career option. The Kentucky Fraternal Order of Police supports the bill, Dotson said.
"People have stopped ... becoming police officers," Dotson said in an interview Tuesday. "So we're trying to incentivize people who go into and stay in that line of work by passing something that will appeal to them financially."
Language in the bill would cover local police, Kentucky State Police and sheriff's departments. Asked why his tax exemption wouldn't include other challenging public service jobs such as firefighters and nurses, Dotson said he's open-minded.
"Oh yeah, all of them have approached and are talking to us about that," Dotson said. "My thing is, I want tax reform in the state of Kentucky. I want to do away with state income taxes altogether. But, being what it is, police officers are, you know, they protect and serve, and we are running short on those right now."
"I'd like to include others, and we may very well down the road," he said. "But I think this will be the first step."
Most Kentuckians pay a state tax on their income, but not all. The state exempts military pay from active-duty members of the armed services, and for senior citizens, it does not tax Social Security or retirement income, such as pensions and 401(k) plans, up to $31,110 annually.
There presently is no fiscal note attached to Dotson's bill estimating its impact on state revenue. A similar measure proposed last year in neighboring Missouri, a slightly larger state in population, came with a fiscal note of about $35 million.
The mean annual wage for police in Kentucky ranges from $45,370 for patrol officers to $76,770 for detectives and criminal investigators, according to the U.S. Bureau of Labor Statistics.
The state's Fraternal Order of Police leadership did not return a call seeking comment Wednesday.
Individual and business income taxes provide the largest single stream of revenue for Kentucky's General Fund, totaling more than $3.1 billion for the first six months of this current fiscal year. The next-largest source is sales and other consumption taxes, at more than $2.8 billion for the same period.
Some lawmakers favor rewriting the tax code this winter to shift the state's financial dependence away from income taxes in favor of consumption taxes. The legislature made changes in that direction in 2018 by levying hundreds of millions of dollars in new sales taxes on services while cutting the top income tax rates, which had reached up to 6 percent for the highest earners.
However, critics say such changes favor the wealthy, who do not need to spend as much of their income as do the poor, meaning a smaller portion of a wealthy Kentuckian's assets must go toward consumption, and therefore, to consumption-based taxes.
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