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Leaders of the Kentucky legislature have proposed revising the state’s tax code, cutting $105 million in state revenue largely by changing how local banks get taxed.

The move comes as Kentucky struggles with a massive pension debt that requires the state to put record amounts of money into the pension systems and as the state consistently has trouble generating enough tax revenue to pay for expenses.

House Speaker David Osborne, a Republican from Prospect, said that the local bank tax break will be expensive, but worth it.

Moody’s has downgraded Kentucky’s credit rating because of the low funding level of the state’s pension systems and lackluster revenue gleaned from taxes.

The news comes after the state missed its own revenue prediction by $135 million at the end of the last fiscal year, which finished on June 30.

“The downgrade reflects revenue underperformance that will challenge the commonwealth’s ability to increase its very low pension funding levels,” Moody’s wrote in a news release. “The commonwealth has one of the heaviest unfunded pension burdens of all states. The commonwealth’s high fixed costs will also restrict fiscal flexibility.”

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Though tax receipts into Kentucky’s general fund grew for the seventh year in a row, the state was still short about $135 million compared to predictions.

According to State Budget Director John Chilton, Kentucky was on track to meet predictions until March, when the state saw revenue decline by $50.2 million over three months due to a decrease in corporate revenues.

“The forecasting challenge going forward will be predicting when revenues will reverse the current four-month slide and resume collections more closely aligned with underlying economic growth,” Chilton said in a news release.