Kentucky's income tax rate will drop from 4% to 3.5% in January, but state lawmakers remain divided on whether to cut taxes further for 2027.The disagreement centers on whether Kentucky met its budget triggers this summer to con tinue reducing the income tax rate. House and Senate leaders have different interpretations of the state's revenue performance.Over the past few years, one of the first priorities for lawmakers has been cutting taxes. Last month, the Kentucky House Republican Whip said the General Assembly should continue reducing the income tax rate. However, Senate President Robert Stivers is not convinced.The division stems from Kentucky's tax cut mechanism established in 2022, when Republicans passed legislation creating a system to gradually reduce the income tax rate until it's eliminated entirely. The reductions depend on meeting certain budget conditions, and this summer Kentucky did not hit its revenue trigger, according to some interpretations.Stivers said lawmakers should follow the policy they established."We set a policy and process and when you set the policy and process, you should follow it and we try to follow it," Stivers said.Stivers emphasized that businesses want consistent policy so they understand the landscape of doing business in Kentucky. He acknowledged the trigger mechanism has to be modified occasionally, but added that Kentucky doesn't need to make more adjustments."Now, we know that you have to modify it on occasion - in the last session we did to where it may not be as big of an incremental decline, but we set some different triggers that would give us the ability to hit those incremental spots to make incremental declines. I don't think we need to go there because we set the policy," Stivers said.However, those arguing to continue cutting taxes say the revenue trigger was actually hit, setting up debate when lawmakers return to Frankfort in January. ...read more read less