LOUISVILLE, Ky. (Nov. 12, 2012) —AARP Kentucky issued a response Friday cautioning the Governor’s Tax Commission on behalf of the organization’s 460,000 statewide members and all Kentuckians entering their retirement years. AARP believes a proposal that cuts retirement income by lowering income tax exemptions and increasing tax rates on Social Security income is ill-timed and will unfairly burden today’s retirees, who have no time to pivot their retirement strategy.
AARP Kentucky State President Jim Kimbrough recognizes that many of the recommendations on the table are academic, but urges the commission to proceed cautiously with proposals that increase taxes on retirees.
“Some 13 percent of Kentucky seniors are living in poverty today,” Kimbrough said. “Asking those on fixed incomes to bear more of the burden for balancing the state budget isn’t a long-term solution. Too many retirees today live in or near the poverty line and are struggling to make ends meet, now.”
In prior testimony before the commission, AARP Kentucky recommended seeking a fair and balanced approach to improving the adequacy of the tax code. AARP urged the commission to consider significant savings available to taxpayers from increasing in-home aging services and decreasing the Medicaid program’s reliance on nursing home care.
AARP Kentucky State Director Ron Bridges urged the commission to reconsider its proposals increasing retiree’s tax burdens, noting that 36 other states offer pension exemptions.
“We again ask the commission reconsider our earlier recommendations to consider the revenue savings available in the state’s Medicaid budget,” he said. “It remains out of balance with 81 percent of its long term care dollars spent in expensive institutional nursing home care. We can do more for less for by increasing home and community based aging services today while saving taxpayers’ dollars tomorrow.”
Today, 13.3 percent of Kentucky’s total population is over 65. Recent AARP research shows overwhelmingly that 89 percent of AARP Kentucky members want to continue living in their own homes rather than moving to an expensive nursing home. The average annual Social Security benefit in Kentucky is $13,795.