By Marty Finley
Source: Louisville Business First
“Good ideas never die, and this is a good idea.”
Those were the first words Mary Ellen Wiederwohl said Thursday evening when Business First asked her about the future of a constitutional amendment allowing local communities the right to on a local option sales tax in the state.
The amendment, if placed on the ballot, would ask Kentucky voters whether they want to authorize a mechanism through which local communities could approve up to 1 percent sales tax on top of the state’s 6 percent sales tax for a limited time, creating special revenue for community projects.
Wiederwohl, chief of Louisville Forward, the city’s economic development arm, said she believes the local option sales tax is still foreign to some legislators as they try to wrap their minds around the vote and its implications.
She said proponents of the local option sales tax feel “this is absolutely about local control,” but some people get hung up on the word “tax.”
Supporters of Local Investments for Transformation, the statewide group formed to lobby on behalf of the local option, have had to repeat themselves numerous times as they try to educate Frankfort on what the legislation is — and what it isn’t, she said.
“Some are still having trouble with it,” Wiederwohl said. “Some wanted more time to think about it.”
The legislation gained bipartisan support in the House during the recently ended session but was stymied in the Senate. It died on the cutting room floor because the Senate did not feel it had the votes to progress on the initiative this year.
The measure needs approval from two-thirds of the members in the Kentucky House and Kentucky Senate and would then have to pass a statewide referendum to amend the state constitution.
As the LIFT group has outlined, advisory boards made up of citizens and elected officials in Kentucky communities would choose capital projects, with specific costs, to place on local ballots. Local residents then would vote on whether to allow a tax increase to fund those projects.
The tax increase would cease after the funding for a project is generated.
Fischer estimates that a 1 percent local-option sales tax could create $138 million annually to fund Louisville projects.
But Wiederwohl and others said the initiative is gaining more momentum statewide, and many believe the 2016 session will be the moment when the constitutional amendment is passed.
If passed by the Kentucky General Assembly in the 2016 session, the constitutional amendment could be placed on a statewide ballot later that year.
“I don’t make it a habit to assume I know the motivations for why it failed,” he said.
Sunderland said there is roughly two-to-one support for the constitutional amendment within the business community, based on the chamber’s research. A recent Bluegrass Poll also found that 63 percent of the 1,917 registered voters surveyed were in favor of the constitutional amendment.
“I think we will be at a point we can get it passed next time,” he said.
Ed Glasscock, a local attorney and businessman and advocate for LIFT, said he was disappointed by the Senate’s decision not to vote on the legislation. He believes the inaction might have been politically motivated in part, adding that some senators appeared to change their minds after initially supporting the legislation.
Glasscock said the revenue generated from local option sales taxes could lead to significant facility upgrades across the state, from needed renovations of convention centers across the state to an upgrade of Rupp Arena in Lexington.
Sarah Davasher-Wisdom, vice president of government affairs and public policy for Greater Louisville Inc., the metro chamber of commerce, echoed Wiederwohl in saying that large-scale projects often take time to receive approval, pointing to the Ohio River Bridges Project as one that took years of convincing.
Davasher-Wisdom said GLI is “really going to work our local channels throughout the state” in the next year to keep the momentum going for the constitutional amendment. These efforts will include visiting organizations across the state.
“The more we talk to people, the more it’s possible for us to move forward,” she said.
Tyler Glick, grassroots director for the LIFT coalition, said the legislation gained more support this year than ever before, bringing on rural and urban organizations, government leaders, civic groups, chambers of commerce and businesses as allies.
During the waning days of this year’s legislative session, supporters were driving hours from remote parts of the state to talk to legislators about it, he said.
“I think that’s a testament to people’s support of it as an economic development tool,” Glick said.
Marty Finley covers economic development, commercial real estate, government, education and sports business.