(Frankfort, Ky.) - Kentucky could be raising the state tax on a pack of cigarettes to $1.
Kentucky House Speaker Greg Stumbo (D-Prestonburg) is proposing the increase in an effort to raise $100 million each year to shore up the state’s pension system for government retirees. The pension system has an unfunded liability of 33 billion.
The proposed increase would be 40 cents per pack of smokes.
According to the Associated Press, last week the Republican-controlled Kentucky Senate passed a bill that requires the state to make its full contribution to the pension system. House Democrats were concerned because the bill, Senate Bill 2, did not identify a funding source.
The Senate bill also would create a 401(k)-like hybrid retirement plan that some House lawmakers want to remove from the legislation.