Louisville Mayor’s Push for Local Sales Tax Option Might be Long Shot – The Courier-Journal

By Tom Loftus; The Courier-Journal

FRANKFORT, KY. — The list of supporters for giving local cities and counties the option to impose a sales
tax is formidable — Gov. Steve Beshear, Louisville and Lexington mayors Greg Fischer and Jim Gray, and
various state legislators, not to mention Kentucky’s Chamber of Commerce, League of Cities and the
Association of Counties.

“We’ve got great momentum. … What I’m hearing from people is that they get it. It’s about jobs,” said
Mayor Fischer, who has made the local option sales tax his priority in the 2014 legislature.
But several key lawmakers say the push to pass a proposed constitutional amendment that would allow
cities and counties to impose a sales tax if local voters agree includes one word that may spell its doom
in an election year — taxes.

“I think it’s got a long way to go to be considered,” said House Speaker Pro Tem Larry Clark, D-Louisville.
Clark said he understands that local governments need help, and he says he hasn’t made up his mind on
the issue. But he noted that his priority must be to try to address badly underfunded state government
responsibilities.

“If I am going to vote for a tax, I want to make sure we address the entire needs of the commonwealth
— education, pensions, health and human services,” he said.

Senate Majority Leader Damon Thayer, R-Georgetown, said, “I don’t think there’s much support for it in
the Senate, because I don’t think this is the time to be raising taxes on people.”

Fischer rejects any characterization of the amendment as a tax. “It’s not a tax. It’s a vote.”

The measure before lawmakers in the coming session is not a vote on raising taxes. Instead, it asks state
legislators whether they want the 2014 general election ballot to include a constitutional change that
would let cities and counties ask their voters to impose a local sales tax of up to 1 percent, for a specific
period of time, to fund specific capital improvements.

Even if the amendment were passed by the General Assembly and the voters in November, supporters
stress there would be no new tax unless local voters specifically agree.“County judges and mayors are
saying that with the smack that pension costs have put on our budgets we just don’t have the money we
need for capital projects,” Fischer said. “And there’s no better way to do that than letting the people decide.”

Gale Cherry, mayor of Princeton in Caldwell County who joined Fischer in pitching the amendment to
the legislature’s budget committee in October, said small city officials feel the same way.

“There are a lot of structural things we need to do that we will not have money for. I need to build a
new fire station here to replace one built in the 1940s as a car showroom,” Cherry said.

Fischer also said the amendment would be a badly needed economic development tool for Kentucky
cities.

“Our people should be able to decide how we can invest in our communities to stay competitive,” he
said.

A 1 percent local sales tax in Jefferson County would generate an estimated $138 million per year. But
Fischer said Louisville’s projects — roads, park improvements, public transit enhancements — would be
selected only after talking with the community.

But members of the legislative budget committee had many questions during a meeting in October,
including one that the mayors could not answer: What happens if a county fiscal court (or Louisville
Metro Council) proposes a countywide sales tax for its project, while a city within the county does the
same thing?

The proposed amendment would not allow the layering of such taxes — the current sales tax (a 6
percent rate imposed by the state) could go no higher than 7 percent in any part of the state.

Fischer acknowledged, “That’s an issue that needs to be resolved. … We certainly intend to have it
figured out before” lawmakers are asked to vote.

The measure does have some enthusiastic legislative supporters. Rep. Steve Riggs, the Louisville
Democrat who heads the House Local Government Committee, said, “Local governments need help, and
it’s just a good idea to let people vote on the question. … It’s too early to say what will happen, but it
stands a chance.”

Rep. Susan Westrom, D-Lexington, concurred: “I’m very much a supporter because it’s democratic to
give voters the opportunity to vote on needed repairs and improvements that the local budget just can’t
finance.”

But House Republican Caucus Chairman Bob DeWeese, of Louisville, said that while he has not made up
his mind, it will be extremely difficult for the measure to get the three-fifths vote required for an
amendment to be put to the voters.

“For a lot of legislators, it’s a vote for a tax,” DeWeese said.Rep. Jim Wayne, D-Louisville, said he’s not
afraid to vote for a tax but that the amendment is “a horrible idea” because sales taxes impose more of
a burden on people with lower incomes. He said he could only back the amendment as part of a broad tax
reform that gives tax relief to the poor and requires the wealthiest Kentuckians to “pay their fair share.”

Fischer said the regressive nature of the sales tax is eased, however, because Kentucky’s sales tax does
not apply to groceries, prescription medicine or home utility bills. Also, the local option sales tax will not
be applied to sales of motor vehicles.

The legislature’s top two leaders — House Speaker Greg Stumbo, D-Prestonsburg, and Senate President
Robert Stivers, R-Manchester — have released statements saying they have not taken a position on the
issue.

But the chairmen of the budget committees indicated in interviews that the amendment has far to go.

“I’d say they have some work to do to get that thing in shape and get it passed,” said Rick Rand, the
Bedford Democrat who chairs the House budget committee.

Sen. Bob Leeper, the Paducah independent who chairs the Senate budget committee, said, “There are some
questions that still need to be answered. I’m not sure they’ll be able to get that done in this session or not.”

Even so, Fischer remains confident. Supporters formally incorporated a non-profit corporation called
Kentucky LIFT (Local Investments for Transformation) in October. And Kerry Stemler, chair of Greater
Louisville Inc. and co-chair of Kentucky Lift, said it is already near its goal of raising about $350,000 to
promote the amendment.

Fischer said Kentucky LIFT’s “outreach and education” effort is aimed at explaining the amendment to
legislators and gaining backing of local officials across the state — so they can pitch the idea to their
legislators.

Louisville attorney Ed Glasscock, the other co-chair of Kentucky LIFT, said, “We’re getting a website up.

We’re going to get involved with social media and do the things we did to get support in Frankfort to the
merger campaign, the arena and the bridges.”

Those things include hiring lobbyists, and in October LIFT registered 14 of them, including former
Kentucky Democratic Party Chairman Terry McBrayer and former state GOP chairs Ellen Williams and
John McCarthy.

Fischer said he did not know yet whether the campaign will include any radio or television advertising.

“We feel if people are informed they’ll let their legislators know where they stand on it, and at the end
of the day, it’s going to be hard for legislators to vote against allowing their constituents to exercise
democracy,” Fischer said.But Sen. Tom Buford, R-Nicholasville, said, “I understand Mayor Fischer
saying this is not a tax. But most legislators know that if they vote for it, their opponent in next year’s
election will call it a tax.”

 

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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