Coming out of a two-year pandemic, facing extreme workforce shortages and working toward economic recovery, the Kentucky Chamber knew we had to have a bold plan heading into the 2022 General Assembly. This included driving down the income tax rate, addressing our low workforce participation, investing in infrastructure, supporting our signature industries, and protecting employers’ rights. Now that we have closed the door on a busy, action-packed legislative session, it is clear the General Assembly prioritized pro-growth policies and delivered for Kentucky businesses.
Topping the list of successes was the passage of House Bill 8, a tax reform package that includes a multi-year plan to eliminate Kentucky’s individual income tax. Last year, the Chamber partnered with the Tax Foundation to publish a report that described pragmatic, responsible options for improving Kentucky’s tax code and making us more competitive. Over the past year I traveled the state and listened to employers talk about the need to reduce income taxes to more effectively compete for employees and economic opportunity. We watched as Indiana, Ohio, North Carolina and other competitor states dropped their income tax rates. We studied Census data that showed low- and no-income-tax states outgrew us on population, GDP growth, job growth and workforce participation. The General Assembly met the moment and put us on a path to truly compete and lower taxes for our citizens.
Another major theme of the session was tackling our workforce challenges, and for such a complex issue, we knew it would take a multi-faceted approach. A major step was to modernize our outdated unemployment insurance system. House Bill 4 encourages Kentuckians to rejoin the workforce more quickly by shortening the number of weeks of benefits when the economy is strong and jobs are plentiful, increasing work search activities, encouraging and incentivizing reskilling and retraining, creating a workshare program for employers, and changing tax calculations for entrepreneurs. This bill will go a long way in supporting rapid reemployment and ensuring the sustainability of our UI system.
As a mother of two small children, I know another major barrier to the workforce is the cost and lack of quality child care. The Chamber championed House Bill 499, the Employee Child Care Assistance Partnership, which creates an innovative, employer-led approach to child care cost assistance. We look forward to seeing this program launch next year, creating a much-needed benefit for working families.
The Chamber has long advocated for increased infrastructure funding and commends the General Assembly for setting aside $250 million for transportation megaprojects, including the Brent Spence Bridge in Northern Kentucky. This funding will be critical as we seek competitive funds from the federal infrastructure package passed last year.
Rounding out the many pro-business successes from this session, we saw a freeze in unemployment insurance taxes and replenishment of the UI trust fund, saving employers significant money, improved opportunities for our bourbon industry to grow, and passage of a responsible two-year budget that prioritized education, including funding all-day kindergarten.
And success was not only seen in the bills that saw passage, but also in stopping legislation that would have proved harmful to business. We commend the legislature for holding the line on bills that would have weakened employer rights related to vaccination, raised taxes on businesses and other proposals that would have decreased our competitiveness, hindered business growth, and moved us in the wrong direction.
Looking back over this session, it is clear the legislature had a focus on growing our economy, improving our tax code and figuring out solutions to our workforce crisis. Because of this, the 2022 General Assembly was easily one of the most successful for Kentucky businesses in recent history and will move Kentucky forward. The Kentucky Chamber applauds the legislature and looks forward to working together to see the Commonwealth reach our true economic potential.
Ashli Watts is Kentucky Chamber President and CEO