Under a system set up by Kentucky lawmakers in 2022, the state could lower the income tax by a half-point if it met certain thresholds.
According to a letter State Budget Director John Hicks sent to lawmakers Friday, tax revenues were more than $1 billion short of the mark — meaning the legislature would not have the option of shifting the income tax from 3.5 percent to 3 percent in 2028.
The new revenue calculation also fell short of a lower trigger amount that could have allowed for a more modest tax reduction.
The news marks the third time in four years that the state has not met the revenue amounts needed to chip away at the tax, which Republicans have said they want to fully eliminate.
The announcement is likely to spark another debate among GOP leaders over whether the state should stick with the guardrails, which are meant to ensure the state isn't cutting taxes too quickly, or carve out new exceptions that allow for further reductions — which some lawmakers argue will spur growth.