Members of the Kentucky House Economic Development
Committee voted unanimously today to pass HB 592, an economic stimulus bill
aimed at moving more Kentuckians into the workforce.
The bill, sponsored by State Representative Keith Hall
(D-Phelps) would create a state-level work opportunity tax credit for employers
(WOTC) and a state refundable earned income tax credit (EITC) for working
families in the Commonwealth. In addition to Hall, nearly 40 members of the
State House have indicated their support for the measure by signing on as
cosponsors.
The bill is also supported by a diverse coalition consisting
of more than forty organizations including the Kentucky Retail Federation,
Kentucky Youth Advocates, the Catholic Conference of Kentucky, the Homebuilders
Association of Kentucky, the Kentucky Domestic Violence Association and the
Kentucky Chamber of Commerce.
“This bill is really the ultimate economic stimulus package
because we’re bringing people into the workforce, many for the first time,
through the WOTC and allowing them to keep more of the money they earn through
the EITC. Many of these folks have never been able to hold a consistent job
because they can’t make enough to pay for basic needs like transportation and
childcare. The EITC credits will help them take home more of the money they
earn so they can afford those basic necessities,” stated Rep. Hall.
The Work Opportunity Tax Credit would provide an incentive
for employers that invest in hiring individuals who might otherwise meet
overwhelming challenges in their search for employment.
Committee Chair and Rep. Ruth Ann Palumbo (D-Lexington),
added “What this bill does for Kentuckians who need help is commendable and it
needs to move forward but probably won’t this session because of the fiscal
impact. However, the work we do now will pay off when economic times are
better.”
Under HB 592, employers eligible under the federal Work
Opportunity Tax Credit may claim a nonrefundable state tax credit equal to 5
percent of the first $6,000 in of wages paid to qualified individuals.
This mirrors the incentives available under the federal WOTC.
“The WOTC incentives included in HB 592 will help offset the
investment employers make in training and educating employees who otherwise
have little or no work experience,” Kentucky Retail Federation President Jan
Gould said. “In return, employees can gain the skills and confidence that they
need to be successful.”
The Earned Income Tax Credit would provide a way for
Kentucky’s working families to keep more of what they earn for the daily
essentials for living – groceries and paying the rent.
“Anytime we can encourage people to be more productive and
can reward people for working, everyone wins,” Rep. Brad Montell
(R-Shelbyville) told committee members before voting for the bill.
Currently, 1 out of every 5 Kentucky tax filers receives the
federal credit. More than 350,000 Kentuckian’s receive either a tax
credit, while some even get money back. The key to qualifying for the tax
credit is you must be working.
“I’m very pleased to see this piece of legislation and
appreciate how these groups have worked together to bring it to us,” Rep. Teddy
Edmonds (D-Jackson) added. “We have people who want to work, to provide for
their families and build their future. This bill removes the barriers that
block their way to employment.”
Under HB 592, a refundable state Earned Income Tax Credit
would allow qualifying workers to receive a state income tax credit of 5
percent of the federal amount for which they are eligible.
“This bill is a commonsense way to help low-income persons
and those struggling to find a job. It increases the opportunities for
employment of certain veterans, food stamp recipients, recipients of
supplemental security benefits, those in many of our poorest counties,
ex-felons, and it provides low-income employees an incentive to work,”
Executive Director of the Catholic Conference of Kentucky Ed Monahan added.
“This is a moral opportunity to help those in a state with the 9th highest rate
of poverty in our nation.
