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Opioid Tax Won’t Pass Kentucky Senate, Leader Says

LRC Public Information

The Kentucky Senate will reject a proposed first-in-the-nation tax on prescription opioids, with the chamber’s top Republican leader saying the idea has too many legal problems for it to be in the foundation of a two-year state spending plan.

The state’s House of Representatives approved the 25-cent per dose tax earlier this month, saying it would bring in about $140 million over the next two years. Lawmakers planned to use that money, plus revenue from an accompanying 50-cent hike in the cigarette tax, to pay for public education among other state services.

But Republican Senate President Robert Stivers told reporters Friday that the tax would not be included in the Senate’s version of the state budget, set to be released next week.

“We would have all types of legal problems, and that would be something that I think would be just a false hope. And I think the House has heard that,” Stivers said.

Stivers did not say what those legal problems might be.

Kentucky has the fifth-highest overdose death rate in the country, a crisis fueled by a surge of opioid-based drug abuse including prescription painkillers, heroin and fentanyl. More than 1,400 Kentuckians died from drug overdoses in 2016, a 39 percent increase in just three years.

Faced with slow revenue growth and a public pension system in danger of collapse, House Republicans viewed the opioid tax as a politically safe way to raise revenue while combating one of the state’s most crippling public health concerns.

Although the idea has been proposed in at least 12 other states, it has not been enacted. If Kentucky’s tax were to be struck down by the courts, it could blow a hole in the state budget.

“The opioid tax has legal problems. I don’t think you can predicate the budget on that,” Stivers said.

Kentucky’s budget has been hit hard by its rapidly deteriorating public pension system, which is among the worst-funded plans in the country. The state is at least $41 billion short of the money required to pay benefits over the next 30 years, prompting Republican leaders to pledge more than $3.3 billion of spending in the system over the next two years.

Bevin proposed cuts of more than 6 percent across most of state government to pay for that spending, including cuts to colleges and universities and school buses for public schools.

House leaders planned to use the opioid tax, among other revenue sources, to restore those cuts. It’s unclear if the Senate would be able to do that without that tax revenue.

“I think we’ve done a pretty good job of putting together monies and things of that nature. It will be an expression of our priorities to the extent we have revenues,” Stivers said. “Our priorities may differ from that of the House and differ from that of the governor. We’ll make those decisions over this weekend.”

Acting House Speaker David Osborne told reporters that restoring the cuts to public education “was very important to this chamber.” He said he did not know what the Senate planned to introduce.

“We’ve not had those conversations with them,” he said.

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