Local option sales tax proposal clears House committee – KYForward.com

Source: KYForward.com

FRANKFORT – A House committee has approved a proposed local option sales tax constitutional amendment that, if approved by the state’s voters, could help cities and counties fund local building and infrastructure projects.

House Bill 1, sponsored by House Speaker Greg Stumbo, D-Prestonsburg, and House Minority Leader Jeff Hoover, R-Jamestown, was approved this morning by the House Elections, Constitutional Amendments and Intergovernmental Affairs Committee. It now goes to the full House for consideration.

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If passed, the bill would place a constitutional amendment on a statewide ballot allowing state lawmakers to give local governments the power to levy up to a penny of local option sales and use tax for specific projects with local voter approval. The tax would be eliminated when the project is paid off.

“It’s fairly simple,” said Stumbo. “It allows local people to choose whether they want to be taxed. It allows them to make the decision and dedicate the funding sources to a particular project. When the bonds are satisfied then that particular tax goes away.”

Thirty-seven states currently allow local governments to use a local option sales tax for local projects, according to HB 1 cosponsor Rep. Tommy Thompson, D-Owensboro.

Rep. Mark Harmon, R-Danville, who has filed a couple of floor amendments to HB 1, questioned language in the legislation that would allow any “residual payments” collected by local governments from the local option sales tax after the levy expires to be used for maintenance of the project.

“To me, that sounds like a clause that says this tax never ends,” said Harmon.

Louisville Mayor Greg Fischer’s representative Sara Massey said the tax would be temporary and that language in the legislation that Harmon questioned deals with late collections coming into local governments after the levy has expired. The funds would not be allowed to go into the state General Fund, according to the proposal.

Fischer – a supporter of the tax option, known in Kentucky as LIFT (Local Investments in Transformation)—said revenue tools available to local governments in the state today are fairly limited.

“As we looked around the country, we saw these (options) were very popular,” he said.

 

What People Are Saying

  • …embodies common-sense, good government principles that most conservatives and Republicans profess to support. It puts power at the local level closest to the people; is taxation with direct representation since the citizens have the right to vote on it; has high accountability by being tied to specific purposes; taxes consumption instead of savings or work; and sunsets instead of continuing indefinitely.

    John David Dyche, conservative columnist
  • 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
  • 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
  • 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
  • …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
  • 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
  • …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
  • 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
  • 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
  • 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