KY TITLING N REGISTRATION ABUSE

Kentucky budget

KENTUCKY DEFICIT SPENDING

How many state employees are there?

Here's some 1996 data State Personnel could update for a story.

In 1996 I taxpayer submitted the following request based upon 1995 Commission On Quality & Efficiency's recommendation calling for elimination of 70 Property Valuation administrators statutory position to save state (in '95 dollars) about $21 million.

However, administrative and legislative branches of state government did not follow 1995 recommendation to lower state's appropriations! No. They legislated all 120 locally elected statutory PVA's as state employees.

When Patton became Governor he raised all court house constitutional officers' annual salaries, substantially!

PVA's cried foul and though they were not constitutional officers, got similar annual salary enhancements.

However, PVA's were exempted from using state merit system salary schedule. PVA's who're state employees locally elected annual salaries were overly generous!

Also, PVA's not exempted from merit salaried state employees' holidays nor from accumulating sick and vacation day per month the same as merit salaried state employees. PVA's got the best of both worlds!

Under present PVA pay schedule a PVA, who has a staff paid for by state, that only has 4,309 parcels of property in the county to value commands an annual salary of $53,660 dollars annually which is about 20% higher than local county average pay.

A PVA's annual pay for valuing 101,386 parcels of real estate is $78,420 annually.

In both cases state funds cost of staffing and county and state fund all office expenses. Here's a story of public servants being paid overly generous pay checks while enjoying "perks" not available to reporters and the rest of private sector employees.

According to 1996 information there are 25% more state employees reported by KENTUCKY ROLL CALL versus NORMAL REPORT CHANNELS.

1996 Cabinet For Human Resources information showed they held 98% of the 85,000 personal service contracts mostly held by physicians.

Another good place to investigate whose being paid out of the state's deficit general fund and for what kind of performance?

CO SALARY P/hr 07 MEDIAN Co.INC parcels
Fulton 53,660 $29 p/hr 9,100 4,309
Adair 57,780 $32 p/hr 39,300 12,127
Letcher 61,910 $32 p/hr 39,300 12,431
Martin 57,780 $29 p/hr 39,300 6,685
Lawrence 56,410 $29 p/hr 39,300 10,303
Pulaski 70,170 $38 p/hr 42,100 43,059
Crittiden 53,660 $29 p/hr 43,200 8,465
Allen 57,780 $32 p/hr 43,600 11,036
Hopkins 70,170 $38 p/hr 43,900 26,787
Boyd 70,170 $38 p/hr 46,100 26,783
Boyle 61,910 $32 p/hr 51,100 12,220
Mercer 61,910 $32 p/hr 51,900 9,605
Warren 78,420 $42 p/hr 52,100 47,305
Fayette 78,420 $42 p/hr 59,800 101,386

In 2007 when Governor Beshear took office there were 33,889 full-time merit state employees and 12,500 non-merit state employees. State Journal, January, 2008 In a Courier Journal article dated 12/28/95 the number of State employees were broken down by Governors. It follows:

Brown 1/1/80 33,449 1/1/83 29,808
Collins 11/1/84 29,808 11/1/87 32,317
Wilkerson 11/1/88 31,143 11/1/91 35,097
B. Jones 12/9/91 35,186 11/1/92 34,497
11/1/93 33,818 10/1/94 33,351
12/95 32,400

In the March 28, 1996 issue of the Kentucky Roll Call it stated "The official employee count is around 44,000. That includeds all three branches---executive, judicial and legislative.....and they receive a pay check from the Personnel Cabinet...to the tune of $1.4 billion a year."

However, "nobody tracks the number of employees hired through grants and contracts. Moreover, nobody tracks the total number of grants and contracts. There's no oversight of the uncounted state workers, even though their salaries come from the state budget in the amount of $2.6 billion a year, of which $2.1 billion is federal money.

Regardless, that's 86% more than KRS 18A employees receive." In an email from Personnel Cabinet's Carol Palmore dated August 26, 1998, she provided the following numbers regarding numbers of state employees under the Patton Administration:
1/1/96 33,115
1/1/97 32,856
1/1/98 32,869

"An LRC study discovered 102,000 employees---and the number could be as high as 170,000, who work for state government but receive their actual paychecks from other organizations, such as area development districts, hospitals, clinics, nursing homes, local health departments, to mention a few."

"The Commonwealth has over 85,000 service contrcts for personnel, which are used to hire people through third parties to perform services that the state wants done. Each contract covers the payroll of (conservatively) 1.2 to two employees, according to the Cabinet for Human Resources, which has 98% of the state's service contracts for personnel."

Legislation was passed by 1995 General Assembly designed to promote state employee retirements as a way to reduce state expenditures.

How many state employees are planning to retire during '99 to take advantage of this new retirement legislation?

It is rumored in March '99 that retirement system has over 9,000 state employees planning to retire in March '99.

How many state employees does the State employ?

How many will take advantage of the latest retirement legislation?

How many of those retirees will immediately come back as consultants and "double dip"?

Thank you for any efforts you may pursue to determine if our taxpayer dollars are being spent wisely.

Greetings,

Bill Huff
dash@copper.net

NO TAX INCREASES? THIS MEANS DEEP CUTS?

DEEP CUTS & COLLECTIONS OVER NEXT TWO BIENIUMMS:

CUT: $100 million state personnel beginning with elimination of 70 PVA statutory offices &
decreasing all legislative and judicial branch employees by 20%

COLLECT: amend legislation making online vendors responsible for collecting and submitting estimated $200 million KY use taxes from online consumer Kentucky purchaser's

COLLECT: $100 million from mis-registered KY owned motor vehicle owners & car lease/rental vendors operating from KY airports

AMEND: ELIMINATE Corporate Tax Shelters equaling estimated $400 million

AMEND: reduce $750 million of state tax expenditures by amending applicable legislation pertraining to state tax expenditures--

AMEND: Legislation replacing defined benefits with defined contribution retirement package
effective: 1/1/08

AMEND: Legislation raising cigarette tax to 75 cents per pack bringing in estimate $75 million

AMEND: Legislation eliminating obsolete industries and adding relevant industry; i.e., services

KY DEFICIT SPENDING

1994 Long Term Policy Research Center published an article entitled

$5.8 Billion and Change

On page 34 states "we project general fund spending to grow approximately 6% each year through FY2004, compared to 5.3% annual growth for general fund revenues. The difference may not seem like much, but at this rate, expenditures would grow 79% between FY1994 and FY2004, while revenues would only grow 67%."

In 2004 authors of $5.8 Billion and Change wrote "We looked at how much money the state might save if broad reforms were enacted to lower the general cost of running the government. By reducing all other costs per person by 10%, the state could enjoy cumulative savings of close to $1 billion over 10 years". [p.58, 59, $5.8 Billion and Change, Peter Schirmer, Michael T. Childress, Charles C. Nett]

In 2008 after Kentucky's elected stewards decided against implementing all 1994 recommended reforms, Kentucky's, i.e.,

1) Medicaid budget is $112 million in deficit;
2) Annual appropriations exceed tax resources by more than 12% creating an estimated $400 million annual debt to creditors
3) Bonded Indebtedness estimated annual payments $1.75 million per year
4) State tax expenditures' total now estimated @$700 million which further depletes tax resourcess to fund other services and benefits

In 1994 Ky legislators were apprised of "deficit budgeting" by Long Term Policy Research Center.

In 1995 Governor Jones established two task forces to study state expenses and income. Expense one was Commission On Quality & Efficientcy and the income one was Commision On Ky Tax Policy. Commission On Quality & Efficiency recommended cutting state expenses over four years by $1 billion dollars.

LAWMAKERS only adopted recommendations requiring no political wherewithal to reduce state expenses over a period of time. Lawmakers did nothing significant to enhance state resources. In addition, they did not discuss skyrocketing state tax expenditures growth.

In 2000 Governor Fletcher addressed state resources by enhancing state resources but leaving state appropriations to the ‘credit card mentality’ crowd---the General Assembly.

The severity of Kentucky’s debt should be reason new Governor declare legislative moratorium on all legislative appropriations exceeding state tax resources for next two bienniums!

One priority in 2008 should be reforming current tax base simultaneously incorporating significant cuts in state appropriations & state tax expenditures while enhancing state resources.

This need is the result of past general assemblies and administrations' acquiescence to overspend & raid other state funds to cover general fund deficits!

In 2008 new Governor & General Assembly recognize 2005 Deficit Reduction Act jeopardizes current and future biennium budgets by significantly reducing Feds past estimated 28% share!

KY must collect all due-and-owing 23 years old taxes!

Legislation must be amended allowing Kentucky a method to collect an estimated $200 million of KY use taxes from online consumer purchases;

ADD ESTIMATED $588 MILLION TO CURRENT APPROPRIATIONS & EQUALIZE TAX BURDEN:

COLLECT: $60 million of Ky usage tax from mis-registered motor vehicles;

COLLECT: $40 million of state and local property taxes from mis-registered motor vehicles;
COLLECT: $40 million of uncollected u-drive-it usage taxes from mis-registered

lease/rental cars operating out of Kentucky airports;
COLLECT: $140 million KY use taxes from KY online purchases

REVENUE NEUTRAL: $80 million weight-distance taxes eliminated recouped through

enhancing Motor Fuels & Truck Registration

KY reduce future appropriations by amending legislation eliminating $200 million of Corporate tax shelters;

Administration & Legislature eliminate $100 million in personnel cuts:

•Eliminate 70 statutory PVA positions saving $50 million annually as recommended by 1995 Commission On Quality & Efficiency task force

Review state employee statutory salaries listed below eliminating

FULTON CO PVA SALARY IS $53,600 COMPARED TO AVG. CO. SALARY OF $39,100

ADAIR CO PVA SALARY IS $57,780

MARTIN CO IS $57,380

LAWRENCE CO IS $56,410

PULASKI CO IS $70,170

CRITTENDEN CO IS $53,660

ALLEN CO IS $57,780

HOPKINS CO IS $70,170

BOYD CO IS $70,170

BOYLE CO IS $61,910

MERCER CO IS $61,900

WARREN CO IS $78,420

FAYETTE CO IS $78,420

Non-merit positions:

Those hired are: When Gov. Steve Beshear was sworn into office, the state's personnel roster listed 33,889 full-time employees on the payroll.

As of Dec. 14, 2007 there were 33,880 on that list, according to records provided to The State Journal by the state personnel department. The State Journal will update weekly a list of those joining and leaving state government.

Here's listing from State Journal dated 12/14/07 of people who joined and left state government from Dec. 10 to 14. [State Journal, 12/14/07]


NAME STATE POSITION MO SALARY

Clara M Girkey, Office Manager, $4,666.68/mo.
Courtney L French, Scheduling Director, $5,166.68/mo.

Ann R Garrity, Administrative Assistant, $4,916.68/mo.

Jessica D Martin, Administrative Assistant, $3,166.68/mo.

Sherman A Brown, Administrative Assistant, $5,000/mo.

Debra H Gall, Administrative Assistant, $3,333.34/mo.

Susan H Bryan, Administrative Assistant, $4,166.68/mo.

Terrell E Renfro, Administrative Assistant, $3,166.68/mo.

Katherine B Allison, Executive Assistant, $7,500/mo.

Virginia L Woodward, Executive Assistant, $7,916.68/mo.

Lee E Jacobs, Special Ad TO Governor, $7,916.68/mo.
Commerce Cabinet
Kentucky St Fair Bd Vice President, $7,916.68/mo.
Education Cabinet
Workforce Investment KY Tech Instructor $3,742.10/mo.

Joseph S Collett, Kentucky Tech Instructor $3,742.10/mo.

Stephanie J Bertram, Adm Secretary, $2,006.08/mo.
Justice and Public Safety Cabinet Department of Corrections
Kimberly A Brown, Office Support Asst II, $1,658.16/mo.

Those who left are:

Staff Attorney Manager/Assistant, $6,149.50/mo.

Selina R Bowman, Executive Secretary II, $3,394.20/mo.
Auditor of Public Accounts
Ellen M Hesen, Executive Director, $8,077.04/mo.

Joseph U Meyer, Policy Advisor, $7,497.54/mo.
Governor
Bess C McGuire, Admin Asst, $3,741.08/mo.

Carolyn A Ammerman, Staff Assistant, $4,501.30/mo.

Cherrilee G Moore, Special Proj Coord $5,933.34/mo.

Cheryl J Hudgins, Executive Assistant, $3,667.70/mo.

\Daniel M Bayens, Dep Press Sec $4,812.52/mo.

Deanna C Brandstetter, AdmAssT $4,016.68/mo.

Elizabeth A Boison, Adm Asst $2,804.18/mo.

Grant D Friedman, Adm Asst $3,183.34/mo.

Grant D Jolliff, Administrative Assistant, $2,583.34/mo.

Donald C Storm, Adjutant General, $10,958.76/mo.
Secretary of the Cabinet
Robert B Rudolph, $10,836.50/mo.

Walter S White, Administrative Assistant, $5,350/mo.
Governor's Office for Local Development
Allen O Wilson, Executive Director, $7,083.34/mo.
State Treasurer
Greg T Haskamp, Staff Assistant, $3,016.68/mo.

Jonathan S Miller, Elected Official, $8,466.36/mo.
Office of State Budget Director
Mary E Lassiter, Dep Exe Director, $9,735.00/mo.
Transportation Cabinet
Office of the Secretary
Charles W Nighbert, Cabinet Secretary, $11,243.38/mo.

Douglas C Hogan, Executive Director, $7,941.68/mo.

Gary E Reece, Policy Advisor, $7,689.62/mo.

Lindy M Robinson, Executive Advisor, $2,916.68/mo.
Office of Legal Services
James R Wood, Executive Director, $7,954.30/mo.
Department of Transportation Safety
Deborah J Stigall, Division Director II, $6,265.84/mo.

Larry A Maggard, Executive Assistant, $6,250/mo.

Tim P Hazlette, Commissioner, $8,477.12/mo.
Department of Highways
Eric T Steely, Division Director II, $5,687.52/mo.

Marc D Williams, Commissioner, $10,079.60/mo.

Warren C Meadows, Exe Asst, $7,000.07/mo.

William G Clark Jr., Exe Advisor, $7,012.96/mo.
Department of Governmental Relations
Ginger R Wills, Commissioner, $8,750.02/mo.

Kathryn A Molen, Executive $3,215.72/mo.

Morgan R Wilson, Special Assistant, $4,375.02/mo.

Richard G Liebe, Special Assistant, $6,562.50/mo.

Virginia J Huddleston, $6,250.00/mo.
Finance Cabinet
Jenny L Stringer, Exe Advisor, $8,223.45/mo.

\Kenneth S Bishop, Exe Director, $5,899.38/mo.
Education Cabinet
Laura E Owens, Cabinet Secretary, $10,836.50/mo.

From 1980 through 2007 Kentucky stewards have done nothing to counter Kentucky's Medicaid deficit. Forty two other states have received a Federal Medicaid Waiver allowing qualifying seniors to have funds to reside in There is a cure but appointed state officials have been reluctant to go against industry lobbyists to apply for Federal Medicaid Waiver allowing Medicaid eligible recipients to use assisted living facilities in same manner as nursing homes; i.e., funding Medicaid eligible seniors to live in assisted living facilities for estimated 40% to 50% savings.

However, Kentucky’s General Assembly still is in the “credit card mentality” by passing legislation giving $100 million cash [appropriations] plus state tax expenditures in income, sales tax incentives to build a $3 billion+ coal liquidation plant!

NEW GOVERNOR FACING:

$4.2 billion dollars of bonded indebtedness created by 2005 and 2006 Legislative sessions
Legislators suggesting $800 million bonded indebtedness to bring up level of funding of state employees’ retirement, ABSENT ANY concessions from state employees who enjoy better-than-private retirees retirement packages that is less than Federal government’s retirement.
$140 million dollars of sales taxes not being collected from Kentucky consumers purchasing online

estimated 150,000 Kentucky car owners circumvent paying $100 million uncollected Kentucky usage & property taxes from mis-registered vehicles of Kentucky motor vehicle owners
uncollected estimated $20 million of u-drive-it use taxes from lease/rental car owners operating out of Kentucky airports.

Kentucky’s weight-distance tax on trucks is cumbersome and expensive to enforce and since 1994 tax evasion factor around 28% needing to eliminate it recapturing $80 to $100 million of tax revenues by enhancing motor fuels tax and truck registration fees (called revenue-neutral strategy)

alleviating Medicaid deficit by allowing qualified Kentucky seniors currently in nursing homes costing Medicaid estimated $75,000 annually to use a Federal Medicaid Waiver allowing those seniors to reside in assisted living facilities costing less than $35,000 annually, reducing state’s Medicaid costs,

ELIMINATING STATE EXPENSES:

Eliminate $100 million merit and non-merit state personnel from administrative, legislative and judiciary branches of State Government; review all personal service contracts, eliminate 70 PVA positions

Amend state employee KRS replacing 5% increase with pay-for-performance

Retrain staff & award pay increases to merit job holders whose positions receive added duties from downsizing

Reassign skilled employees

Eliminate practice of technical state employees from being rehired immediately after retiring at same or more pay

Legislate new employees be on a defined contribution retirement program

Recommend better ways for state to stop payment on checks with insufficient funds

Review personal service contracts eliminating unnecessary & political ones

Review estimated $700 million state tax expenditures to eliminate, renovate, equalize

OPTIONS OF NEW GOVERNOR

Enhance state resources by:

Expanding Ky sales tax base thru inclusion of selected services
Collecting estimated $350 due-and-owing usage property, u-drive-it taxes and registration fees on all Ky owned mis-register cars
Eliminate costly administration of unfair, cumbersome weight-distance tax on trucks & recoup by enhancing motor fuels and truck registration fees
Amend H.B. 44 to make permanent the 15.5 cents real estate property tax rate
Amend H.B. 44 enhancing state rate cap to 6% & legislating more tax authority to local governments
Amend legislation leaving estate tax as is
To insure future compliance with Kentucky’s motor vehicle titling and registration and usage & property tax laws recommend H.B. 698 be passed:

AN ACT relating to motor vehicle registration.

Be it enacted by the General Assembly of the Commonwealth of Kentucky:

Ssection 1. a new section of KRS 186.000 to 186.260 is created to read as follows:

(1) except as provided for in subsection (2) of this section, any motor vehicle operated on a public highway which is housed in the commonwealth for a period of more than one hundred eighty (180) days in any calendar year shall be required to be registered under the provisions of krs 186.050.

(2) the following vehicles shall be exempt from the provisions of this section, if the vehicles are properly registered in another state:

(a) vehicles that are properly registered in another state under the provisions of krs 186.050(13);
(b) vehicles used by students who are residents of another state but are attending a post secondary educational institution in the commonwealth;
(c) vehicles registered to active-duty members of the armed forces who are assigned to duty at a base or station within the boundaries of the commonwealth; and
(d) vehicles which are registered to individuals in another state and meet the criteria for registration as an historic motor vehicle under krs 186.043.

section 2. KRS132.570 is amended to read as follows:

(1) a person shall not willfully make a false statement or resort to any device to evade [property] taxation. any person doing so shall be subject to [current and up to 4 back years of omitted property taxes, if applicable, including penalty and interest to be collected by kentucky department of revenue and dispersed by kentucky department of revenue to local taxing jurisdictions in the county in which the property is liable for assessment and property taxation and dispersed to all citizens, law enforcement officers responsible for identifying tax violators
(2) in the case of a person who fails to register a motor vehicle under the requirements of section 1 of this act, twenty-five percent (25%) of the imposed penalty under this section shall be transferred by kentucky department of revenue to person reporting tax evader

Kentucky’s state budget is more than $1 billion deficit over one biennium, according to governor’s statement.

A billion seconds ago it was 1959!
A billion minutes ago Jesus was alive.
A billion hours ago our ancestors were living in the stone age.
A billion days ago no-one walked on the earth on two feet.
Latest KY biennium budget over $15 billion with large portion coming from Federal Government.

2005 Deficit Reduction Act will reduce Federal dollars, next KY biennium budget since it cuts $40 billion from states.

Governor Beshear---- whose let it be known publicly---is only interested in being Kentucky's governor needs to do more than cut 3% from each state agency.
In 1995 task force called Commission On Quality & Efficiency recommended to KY’s elected stewards to cut $1 billion over four years! Of course, past general assemblies and administration of Governors’ Julian Carroll, John y. Brown, Martha l. Collins, Wallace Wilkinson, Brereton Jones, Patton and Fletcher who adopted a “credit card mentality” allowing state to spend more tax dollars than it collects.

Such "credit card mentality" is one of the reasons in 2008 Beshear's administration is facing such tough financial decision making---if he does not make right ones draconian cuts will have to be made as proposed above.

Bill Huff

Motor Vehicle Tax Evasion
by
Tom Hewlett and italicized underlined text inserted by Bill Huff
November ’98 House Program Review and Investigation Committee
(See Legislative Research Report #282)

The Program Review and Investigation Committee of the Kentucky General Assembly was told at its November [1998] meeting Kentucky state and local governments may be losing as much as $30 million annually through the abuse or circumvention of the state's motor vehicle registration system.

If Kentucky were an "average" state, the loss would be $17 million. 'While all states experience some motor vehicle registration avoidance," said state analyst Tom Hewlett, "we believe Kentucky's problem with motor vehicle registration abuse may greater than average." Hewlett said.

The loss figure is an estimate calculated using statistics from a national study conducted by the Council of State Governments and data provided by Kentucky State Police Operation Border Crossing.

State Police took over motor vehicle mis-registration compliance work in November ’97, after the Kentucky Revenue abandoned their “citing” efforts in ’92, even though continuing to send and collect tax bills till mid ’93 from the estimated $8.2 million unbilled ‘violators” backlog. However, citing budget constraints in mid’93, the Revenue Cabinet abandoned omitted and delinquent tax billings from the estimated $8.2 million dollars of uncollected usage & property tax backlog. The Kentucky State Police compliance work took over citing illegally licensed motor vehicles.

Hopefully, these violators were forwarded to theRevenue Cabinet for billing since they were circumventing Kentucky’s usage and property taxes. The State Police involvement became a reality because the Transportation Cabinet’s Division of Vehicle Enforcement Officers, whose statutory duty it is to cite such motor vehicle violators, would not perform their statutory compliance duties due to a conflict with their priority assigned truck safety and a court case involving an enforcement officer making a DUI arest in late ‘80s that ended up in court from the late ‘80s till June ’94. The court ruled Vehicle Officers are to enforce all laws pertaining to motor vehicles.

Based on the CSG study, Hewlett said Kentucky could be expected to have a higher than average level of tax evasion due to the presence of border states that do not levy property tax on motor vehicles or do not require proof of insurance at the time of motor vehicle registration. He said the $30 million annual loss would be the result of these differences. Based on Hewlett's calculations, the loss of usage tax revenue could be as much as $15 million annually.

In 1997, Kentucky taxed more than three million vehicles, collecting $244.6 million in property taxes and $317 million in usage taxes, according to Hewlett. Usage tax revenue is deposited in State Road Fund, and approximately 65% of the omitted property tax collected goes to county and local governments to fund schools and other functions of local government, The remaining 35% of motor vehicles property taxes is deposited into the state's General Fund.

Hewlett said motorists avoid paying motor vehicle property and usage tax by licensing their cars in other States that have no property tax on motor vehicles; abuse the use of Kentucky's temporary tags; or fail to renew the registration on their vehicles. As a result, he said, Kentucky is losing income that should go for the repair of the state's roadways and fund local schools and other services. Kentucky's problem, he said, is exacerbated by Tennessee and Ohio not having vehicle property taxes.

Bill Huff, who appeared as a former Revenue Cabinet employee involved with past Revenue Cabinet attempts to collect from these outlaws added, lack of budget due to lack of priority placed on tax evasion by the administration, legislators and judicial branches of government.
Citizens of Kentucky living in counties near Tennessee or Ohio are tempted to cross the border to register their vehicles.

In addition, he noted, Tennessee does not require proof of insurance at the time of vehicle registration serving as "a double incentive" for people living along the Kentucky/Tennessee Border to register their vehicles in Tennessee.

Hewlett 'said Revenue officials have said existing laws are adequate to prohibit tax evasion by Kentucky residents, but "enforcement of the existing laws was inconsistent. He said local police and county sheriffs often do not assign a high priority to motor vehicle registration abuse. At the same time, local law enforcement generally has better visibility over their respective communities than any state law enforcement agency.

The 1998 PRI Committee staff recommended: (See LRC Research Report #282)
· Continued collaboration between the Revenue Cabinet and the Kentucky State Police to find and properly bill individuals with improperly registered motor vehicles.

The General Assembly consider providing an incentive to local law enforcement officials, as well as state police, Vehicle Enforcement Officers, Revenue Cabinet property tax personnel involvedwith omitted property tax compliance by mandating any fines or penalties assessed against motor vehicle registration abusers be shared with the organization responsible for identifying the registration abuse.

Hewlett said, providing the opportunity for sheriffs and local police departments to supplement their budgets by proceeds from detecting motor vehicle registration abuse should be an adequate incentive to get them involved in the effort.

Bill Huff, a retired Revenue Cabinet official who headed the [Revenue Cabinet’s Freddie Freeroader program before his retirement in 1994 told there are as many as 65,000 passenger cars using illegal registration amounting to an estimated $35 million lost in usage tax and $6.5 million in property tax evasion. He based his estimate on an extrapolation of evasion statistics compiled by [he and his freeroader staff] the Revenue Cabinet from 1987 through 1992.

In 2006 adding estimated 26,000 migrant drivers to normal motor vehicle tax evasion, its estimated over 150,000 now operate daily on Kentucky’s highwasy…FREE….COSTING STATE & LOCAL GOVERNMENTS ESTIMATED $82,500,000 DOLLARS!

In addition to passenger motor vehicle usage tax evasion operating on KY’s highways….FREE….Huff said there was significant usage tax evasion among Kentucky’s U-Drive-It permit holders---especially those operating fleet lease/rental car fleets from the Greater Cincinnati airport---should be carefully reviewed. Under current KRS 138 KY statutes pertain to Transportation Cabinet’s, Divison of Motor Carrier rather than Division of Vehcile Enforcement Officers, compliance chapter 138 usage taxes..

Huff urged the “total involvement” of the Finance Cabinet's Vehicle Enforcement Officers to work with Finance Cabinet's Department of Revenue property tax compliance program. He noted a 1994 court decision had ruled vehicle enforcement officers are responsible for enforcing all statutes pertaining to motor vehicles [citing Kentucky motorists operating their motor vehicles upon Kentucky’s highways using illegal license plates] and “since DMV is a Road Fund agency, it would seem only logical they would be involved.”

Huff also said, “The judiciary should be educated to help eliminate tax evasion. …A “judicial attitude” about this type of law enforcement has helped perpetuate tax evasion. Huff supported the PRI Committee staff incentive recommendations.

Representative Charles Siler, Williamsburg, whose district borders Tennessee, said Tennessee tags were prevalent on vehicles in his district. He said “this means the vehicles are usually not insured, and there appears to be no enforcement” with regard to the Tennessee plates.”
State Police Commissioner Gary Rose said he agrees there is significant tax evasion. He noted the State Police had written 9,655 citations for improper vehicle registration since the border crossing program was started.