Fischer wants to follow Oklahoma City tax model – The Courier-Journal

By Sebastian Kitchen
Source: The Courier-Journal

Louisville Mayor Greg Fischer quickly mentions Oklahoma City as a model when talking about his push for the local option sales tax, which would allow voters to decide if they want to increase their sales tax by up to 1 percent to pay for specific projects.

Leaders of that conservative city have repeatedly convinced citizens to support increased taxes to pay for projects from parks to schools to a basketball arena and whitewater rapids.

Oklahoma City Mayor Mick Cornett said the program, now in its third set of major projects, has “changed everything” and the results have been dramatic, with the city successfully recruiting major employers, the construction of almost a dozen downtown hotels, educated young workers moving or staying there and landing a professional basketball team.

“We had probably the worst economy in the country in the late ’80s and now we may have the best economy,” said Cornett, who added the city generally has about the lowest unemployment rate in the nation for metropolitan areas. The rate was 3.9 percent in October compared to 5.1 percent for the Louisville metro area, according to the Bureau of Labor Statistics.

Fischer said the local option will again be his top priority when the legislative session begins this month in Frankfort.

State lawmakers would have to approve the proposed constitutional amendment, which would then go to voters. If they decide to amend the constitution, local governments would be able to put projects on the ballot and voters would decide if they wanted to increase the local sales tax they pay by up to 1 percent to fund those specific projects with the tax ending once those are paid off.

“I can’t imagine a state legislator justifying not allowing cities to have the option to allow their citizens to vote on things,” Cornett said. “I think it’s the most Democratic form of taxation, allowing local citizens to vote on their taxation levels.”

At least one of Fischer’s fellow Democrats, state Rep. Jim Wayne, disagrees with the mayor and argues the tax adds to the burden of the less fortunate to fund projects enjoyed by the wealthy.

Fischer said the tax would allow Louisville to generate the funds to build a project such as waterfront park — which took two decades — in a year.

Fischer has said the tax could raise $100 million to $130 million a year in Louisville and could quickly fund projects such as building two new regional libraries or finishing the more than 100-mile Louisville loop that includes trails and parks. He said they could pay for a regional library in six weeks when it took four years to build the most recent one.

Oklahoma City transformed from a “dusty town,” Fischer said, to a lively city that has redone its riverfront, attracted the National Basketball Association’s Oklahoma City Thunder, and there are plans for a large, new convention center.

He said Oklahoma City is a “very Republican city” but the local tax allows for local control and home rule.

Even in an area that is conservative and anti-tax, Cornett said people support the initiatives because they “know what they are getting and they know when the tax ends.”

The model

Beginning just over 20 years ago, Oklahoma City officials gave citizens the option to vote on a set of projects with them knowing what it would cost and how long it would take to pay for them. Voters approved a temporary 1-cent sales tax.

More than $309 million was collected from the tax during the 66 months it was enacted and about $54 million in interest was generated from the deposited tax revenue.

The original projects included a downtown ballpark for Triple-A minor league baseball; renovation and addition of almost 100,000 square feet to the convention center; improvements to the state fairgrounds including new horse barns, renovations to the arena, a new livestock show facility, and several exhibition areas; the Bricktown Canal; a new four-story, 112,000-square-foot library and learning center; new trolleys; a “near-rebuilding of Civic Center Music Hall” that includes a performing arts theater; improvements to a 7-mile stretch of the North Canadian River with trails, landscaping, fishing and boating; and construction of a 20,000-seat downtown arena that is now home to the Oklahoma City Thunder.

“We had an old, skanky river that goes by downtown through the middle of Oklahoma City,” said city spokeswoman Kristy Yager. “We damned up the river.”

She said the river never held water and had to be mowed.

“It was an eyesore, a dumping ground for people,” Yager said.

“It was a very, very rocky road in trying to figure out MAPS 1 (term for the Metropolitan Area Projects capital improvement program) and trying to manage expectations in the speed in which we could raise the funds and start building the buildings,” Yager said of the pay as you go system.

But, after the success, she said they moved forward with two more installments of MAPS, with one in 2001 for more than $500 million to improve the city’s public schools and purchase technology and buses, and another starting in 2010 for other downtown projects and for senior centers.

They expect the most recent installment, which will end in 2017, to generate $777 million.

In 2010, Yager said the list was passed as “all or nothing” with people approving the package and not individual projects. A citizen board has overseen all the projects, as is proposed in Kentucky.

The current list includes a new downtown convention center, a 70-acre downtown park, a street car system, improvements to the Oklahoma River, an expo center at the fairgrounds, several senior health and wellness centers, a whitewater kayak and rafting center, installing stadium lights for night races on the water, and other infrastructure for the whitewater facilities.

“This investment in ourselves has certainly breathed new life into downtown,” Yager said. “… It’s the best investment we’ve ever made.”

When asked if the Oklahoma City Thunder would have moved there from Seattle without the initiatives, Cornett said “absolutely not.” “All of that is only the result of MAPS,” he said.

“I am telling you it changed everything from the physical nature of the city” to the psychology to the “demographic shifts of young people wanting to stay and young people from other parts of the country wanting to move here,” Cornett said.

And it all began with a high-profile rejection by a major company Oklahoma City was trying to lure.

“We had been seeking economic development opportunities and we were turned down in a high-profile United Airlines case because the quality of life in our community had dropped so low and United didn’t want their employees living here,” Cornett said. He said the decision was based on quality of life and not incentives offered to companies to locate in certain communities.

“The leadership in the city realized we have to improve the quality of life,” Cornett said, And they realized they needed to invest in their own city.

Kentucky

The local option has a bevy of supporters in Kentucky including Gov. Steve Beshear, former governors, mayors, a host of business organizations including the Kentucky Chamber of Commerce, and a growing number of lawmakers including House Speaker Greg Stumbo, a Democrat who announced the proposal would be House Bill 1 and the top priority in the 2015 legislative session.

However, even though the top Republican in the House, Jeff Hoover, supports the effort, Senate Republicans are more skeptical.

“I don’t see a lot of enthusiasm for that right now,” said Senate Majority Floor Leader Damon Thayer, R-Georgetown. “Constitutional amendments can’t go on the ballot until 2016 anyway, so I don’t really understand the urgency in 2015, and I personally would like to see some sort of tax offset so that the taxpayers in the cities where this is considered don’t end up with a larger tax burden.”

Senate President Robert Stivers, R-Manchester, said the Republican caucus has discussed the issue at length and “we’re kind of all over the board and there’s a lot of indecision about it.”

“It’s a local control issue for many people,” Stivers said. “Other people view it as a potential of increasing a tax. But I think it is a local control issue and … as much as possible, I like local control.”

Louisville Mayor Greg Fischer gives his second inauguration speech at Metro Hall Monday after he and new Metro Council members were sworn in.

Fischer said last legislative session, when he spent a lot of time in Frankfort, was a session to educate members and now more communities have projects they would like to pursue identified and more lawmakers are educated and have heard how it could assist with local needs, especially as the state budget tightens.

Sara McGown Massey, director of intergovernmental affairs for the Fischer administration, said while Louisville might have plans for larger projects, other communities might be able to build a city pool or put fiber optic lines in place.

“This is for communities of all sizes,” Fischer said. He said Princeton wants to build a fire house.

Fischer said the effort has bipartisan support and he feels they have made progress with House and Senate members.

Stumbo, who said he changed his mind on the issue, said “I think that it is gaining a lot of traction.” He said in December that the bill had 16 cosponsors, led by him, Hoover and House Majority Whip Tommy Thompson, and he expects to have 35 or more by the time the legislation is filed.

“I think it will enjoy a favorable reception in this chamber,” said Stumbo, D-Prestonsburg.

He said his concern, initially, was the conflict if state lawmakers later decide to raise the state sales tax.

Concern

Wayne, D-Louisville, is an ardent opponent and chastised Democrats for supporting it.

“House Bill 1 is a regressive tax proposal that hurts working Kentuckians and all those living on the margins,” Wayne said. “… This is another way for the haves to take money from struggling Kentuckians to build more playgrounds and entertainment centers for the elite.”

Kentucky has a 6 percent sales tax, plus the local tax in respective communities.

When asked about the harm on low-income workers, Fischer said the sales tax would exempt food, medicine and utilities as the current state sales tax does.

Fischer said, if the constitution is amended, the local option is just that — no government body has to utilize it.

A citizen body and then an elected body would decide on the projects before placing them on the ballot.

“What the local county or city has to decide is do they want to play to win. Do they believe enough in their cities and counties to invest in the future so they can grow their economies and grow jobs,” Fischer asked.

Hoover, R-Jamestown, said citizens statewide will have an opportunity to decide whether they want local government to have the local option and then, if approved, be able to decide locally what projects they support.

“I have always thought that this was government at its best. It’s government at the local level,” Hoover said.

Rep. Steve Riggs, chair of the local government committee in the Kentucky House of Representatives, said it is the essence of liberty and democracy for people to decide whether they want to pay more to improve the community as a whole. He was an early supporter of the local option and expects there to be more support in the 2015 session.

“It gives the ability to the local citizens to determine whether or not their money, their own local money, can stay local and help their own community as opposed to sending it off somewhere and hoping and praying that a little tiny percentage comes back,” said Riggs, D-Louisville.

Staff writers Mike Wynn and Gregory A. Hall contributed to this report.

Reporter Sebastian Kitchen can be reached at (502) 582-4475. Follow him on Twitter at @writeonsk.

 

What People Are Saying

  • “Putting the local-tax amendment on the November 2014 statewide ballot is a no-brainer. If local people want to levy local taxes on themselves, they should be able to.”

    Al Cross, Courier-Journal columnist
  • Jeff-Bringardner-headshot-only“This is a way to keep dollars in the area, to come up with a diverse slate of projects that sync up with the long-term plans of the community and get voted on by the people”

    Jeff Bringardner, President, Humana Kentucky
  • BillLamb“If Louisville could adopt a 1% Local Option Tax, it would impose a minimal burden, but would raise over 90 million dollars a year.”

    Bill Lamb, President and General Manager for WDRB and WNYO
  • Bill Samuels Bellarmine Portrait“Local option makes all the sense in the world. Offering citizens the opportunity to vote on investing in their community is how our country ought to operate.”

    Bill Samuels, Chairman, Emeritus Makers Mark
  • …a new way for communities to see the projects they want and need go from the drawing board to reality — and to do it for themselves.

    Jim Host, founder of Host Communications and former State Commerce Secretary
  • LIFT is a tried-and-true tool that allows for more voter involvement in the process.  Voters, not politicians, would help determine big picture, visionary projects that could improve quality of life.

    Dave Adkisson, President and CEO of the Kentucky Chamber of Commerce
  • …an idea whose time has come, and could be a crucial economic development tool which will help our local communities build a better future, and the new jobs and businesses we need.

    Hal Goode, President and CEO of the Kentucky Association of Economic Development
  • In our opinion, Kentucky voters should be allowed to vote on the local option sales tax because it could fund public facilities without increasing property taxes.

    Morehead News
  • It will allow communities to plan and pay for improvements to enhance civic and economic life without going hat in hand each budget session to Frankfort.

    Lexington Herald-Leader
  • The beauty of it is that local voters have the say-so as to its enactment, and they have a sense that they are getting what they pay for.

    Princeton Times-Leader