By David Floyd
Source: The Courier-Journal
Let’s say your General Assembly increased the sales tax from 6 percent to 7 percent so that we could then distribute that 1 percent increase to every county in the state. That would be a tax increase, and the public would be angry.
What we have instead, in House Bill 1, is something called a “local option sales tax.” This is the proposal: Make available to citizens the option of assessing themselves up to a 1 percent sales tax, for a limited period of time, for a capital project within their geographical borders.
Nowadays, the decision to build, for example, a community center is up to the city or county elected leaders. If they do, and you don’t like it, they know that you can throw them out of office when they come up for reelection. But in that case the tax money is already obligated; the community center will be built.
If a county wants a bigger project, they usually go to Frankfort and ask us for a favor; please give us cash or taxing/bonding authority. That’s how the Yum! Center got built, as well as many other projects in Kentucky.
The deciding factor in this is the power structure in Frankfort. Nelson County has two legislators (most Kentucky counties have two legislators, a senator and a representative.) Jefferson County has 28, which translates to a lot of noise in favor of the favor.
When a county/city goes to the legislature asking for money, Frankfort has the power to approve that project. Inherent in the power to approve is the power to reject. LOST takes away some of that power, which is one reason I support HB 1.
Try to imagine for a moment that instead of the current system, voters have the right to decide whether to build that community center. That is the idea behind LOST.
Here’s how it would work, and let’s use a hypothetical in Nelson County. The fiscal court decides that we desire the ability to host small conventions, thus increasing visitors with the accompanying economic activity. We need meeting space and an auditorium of sorts. They gather the project estimates and decide on a $15 million development. Fiscal court votes to place an additional 1 percent sales tax within the borders of Nelson County to fund the project. That tax will expire in, say, 5 years. With the LOST, they must go to the voters for approval — cannot do it on their own.
On the date of the next general election, citizens of Nelson County go to the polls and vote as usual for elected offices, but also on the matter of the convention center and the 5-year tax. If it passes the project goes forward, the extra 1 percent pays for it, and in 5 years, the tax goes away.
But for that to occur, here’s what must happen first. The voters of Kentucky approve the LOST constitutional amendment in 2016. Later, the fiscal court votes in favor of the convention center project. (There is no general election in 2017, so the first opportunity for any county/city to present a plan to the voters would be November, 2018.) And then the voters of Nelson County would vote to approve or disapprove the project.
I have no recollection of Nelson County voters approving an additional tax. We rejected a higher school tax about 10 years ago. Up in Jefferson County, the voters disapproved a higher library tax maybe 4 years ago.
So, for the voters of Nelson — or any — county (or city) to approve a higher tax, it’s going to have to be a highly desirable project; not for a few people, but for the whole county. It’s just not going to happen for a project that pleases one special interest. While I think it’s unlikely, it’s entirely possible that voters in some city or county might unify behind a project that is important to them.
Under the current system where Frankfort decides, I don’t like that my tax dollars go for a project that no Nelson countian will ever see, much less use. With the LOST, if Fulton County or Breathitt County voters want to pay for their own project, that’s fine with me. They tax themselves, and leave the rest of us alone.
I voted for HB 1 because it decentralizes government, returns power to citizens, and reduces the influence of large counties.
David Floyd, R-Bardstown, represents House District 50 in the Kentucky General Assembly.