FRANKFORT, Ky – The local option sales tax amendment advocated by Louisville Mayor Greg Fischer passed the same legislative committee on Tuesday that it passed last year – and proponents said afterward that they’re optimistic about its chances this year.
House Bill 1, sponsored by Speaker Greg Stumbo, D-Prestonsburg, passed the House elections and constitutional amendments committee 6-1 with one pass vote. Stumbo said it will get a vote in the full House, something that didn’t happen last year because he said he didn’t have the votes.
As a constitutional amendment, the bill needs 60 votes to pass the House – a potentially challenging task with not all of the 54 majority Democrats in favor of the idea.
While House Minority Leader Jeff Hoover, R-Jamestown, is a co-sponsor and Louisville Republican Kevin Bratcher voted for it in committee, GOP member Joe Fischer of Fort Thomas, voted against it in committee.
Stumbo said after the committee vote that he believes he will need about eight to 10 Republicans to pass the bill and that he will have most of the Democratic caucus behind it. Stumbo said he and Hoover haven’t shared vote counts yet.
“I think it’ll pass by a healthy margin,” Stumbo said, adding that he believes he has the votes already and that the vote by the full House could come by the end of the week.
If it should pass the House, Senate President Robert Stivers, R-Manchester, has endorsed the concept but has stopped short of saying it would pass the Senate.
Mayor Fischer told the House committee that 37 states have a similar tax and passing it would help economic development.
“It it’s purest sense, this is about local control and home rule,” he said after the vote.
If approved by three-fifths of the members of both chambers and ratified by voters statewide – the earliest would be November 2016 – then local projects could be funded through a temporary sales tax increase of up to 1 percent that would have to be approved in a local referendum.
The bill is endorsed by Gov. Steve Beshear, the six living former governors (and was endorsed by Wendell Ford before he died last month) and the Kentucky and Louisville chambers of commerce – among others.
As a measure of the opposition, Rep. Jim Wayne, D-Louisville, spoke against the bill in committee, saying it would be a regressive tax that would hurt the poor by taking larger amounts of their limited incomes.
“I dare any of you to try to live on $30,000,” Wayne said, adding that there’s nothing to offset it as their would be in a broader tax reform that he supports. “… This as a standalone proposal is not good for Kentucky.”
Also, Kentucky Retail Federation President Tod Griffin also spoke in opposition to the bill, saying the local-option tax would put Kentucky businesses at a disadvantage with out-of-state, mail-order firms that wouldn’t be collecting the extra sales tax.
Proponents say that the tax only could be implemented if local citizens approved it.
“Fundamentally this is about whether or not you believe enough in your city or county to invest in it so you can grow and you can compete in the 21st Century economy,” Fischer said. “Our point of view is that you have to invest as competitor cities and counties are around the country … for us to attract talent to grow jobs.”
If the economy grows from the projects that the tax would pay for, Fischer said retailers would benefit.