At a committee meeting Wednesday, State Budget Director John Hicks made it official.
"Fr fiscal year 24, the income tax rate reduction conditions have been met," he announced.
What does that mean for Kentucky taxpayers? It means the GOP-led legislature is likely to introduce legislation in January lowering the state income tax another .5 percent — going from 4 to 3.5 percent. If passed, the change would take effect January 2026.
Sen. Chris McDaniel, who chairs the Senate Appropriations and Revenue committee, applauded the news — crediting the state's “conservative budgeting." He said over the past decade, the state’s budget reserve has grown from zero to $5 billion.
The state has met the preconditions to lower the income tax in previous years – overall taking the number from 6 to 4 percent. Last year, the state did not meet the necessary thresholds and lawmakers left the rate flat.
