Sales tax bill languishing in Senate – Messenger-Inquirer

By Joy Campbell Messenger-Inquirer
Source: Messenger-Inquirer

 

House Bill 1, a key piece of legislation in the 2015 Kentucky General Assembly, appears to be languishing in the Senate’s State and Local Government Committee.

But Sen. Joe Bowen, an Owensboro Republican and the committee’s chairman, said Wednesday that it’s still possible for the local option sales tax bill to pass in the session.

He said he has committed to support the legislation.

So far, though, he has not called the bill up for his committee to hear and debate. The committee met again Wednesday without hearing the measure.

HB1, with Speaker Greg Stumbo as the main sponsor, would put a constitutional amendment on the 2016 ballot that would allow local governments to impose a temporary local sales tax — if voters approve.

The bill has broad support with county judges, chambers of commerce and a host of organizations that are part of a coalition called LIFT — Local Investments for Transportation.

But Bowen said the bill does not have support in the Senate’s Majority Caucus.

“As committee chairman, I have great latitude to call bills, and on major legislation, leadership will weigh in, and weigh in heavily,” Bowen said Wednesday afternoon. “This is one of those times when leadership has weighed in. This bill doesn’t have the support of my caucus. It’s better that I don’t call it right now. At least it’s still alive.”

LIFT spokesman Tyler Glick said passage of the bill could come down to the wire.

“The Kentucky General Assembly is notorious for waiting until close to the final gavel to move on various big-name pieces of legislation,” said Tyler Glick with LIFT. “Republican Senate Majority Leader Robert Stivers has called the proposal the ‘purest form of democracy.’ Putting this ballot question in front of the voters is not difficult. It will come down to whether the Kentucky Senate believes locals should decide their own destiny, or whether Frankfort will continue to drive decision-making from the top.”

Asked whether he knows any issues Senate President Robert Stivers and other leaders have with the bill, Bowen said it doesn’t have a lot of grassroots support from some merchants/heavy industry whose utility rates would go up if such a tax got through the various local steps.

That would not appear to be of concern to chambers of commerce, including the greater Owensboro chamber and the Kentucky chamber, which support HB1.

Cities and counties are limited in ways to generate revenue, and when fixed costs rise, local communities are left with few options to provide the services and amenities that the public expects and deserves, according to a local chamber news column. A local option sales tax would give power to local people to decide if they want to invest in their future, according to JAT Mountjoy, chairman of the local chamber’s Advocacy Committee.

“Some people may not realize their utility rates could be taxed,” he said. Residential rates would not be impacted, he said.

Daviess County Judge-Executive Al Mattingly, who has been a strong advocate for the legislation, said Wednesday that he’s still hopeful “that Senator Bowen will use his considerable influence and political skill to help pass this bill that is so important, not just for this area but for the entire commonwealth.”

Mattingly said the bill has become political.

The legislation passed the House by a 62-35 vote Feb. 12.

At least one Republican senator, Paul Hornback of Shelbyville, thinks the bill can pass in that chamber. He issued this statement Wednesday afternoon on the status of LIFT:

“Until the final gavel falls, anything can happen during a legislative session. LIFT Kentucky has far too much support from Kentucky’s business community and local elected officials for the Senate not to consider the bill, so I don’t think the matter is closed in the slightest. We are working to make sure members are as educated as they can be, and I believe if we can get LIFT to the floor of the Senate, then we have enough votes to pass it. It deserves a fair vote. So do the people of Kentucky.”

Bowen said he’s comfortable with the bill because it has a lot of “firewalls.”

First, Kentucky voters would have to pass a constitutional amendment. If that passes, voters in each community then would have to vote yes on adding a sales tax of from 0.1 percent to 1 percent for a specific project.

“I’m comfortable with that,” Bowen said.

Bowen could call a special committee meeting to get the bill heard.

Owensboro Mayor Ron Payne said he thinks a local sales tax would be a nice option to have, but he doesn’t see any needs on the horizon for it.

He said he told Bowen that if legislators couldn’t pass HB1, then an alternative would be to amend the current law and allow local governments to have local referendum votes.

In Owensboro’s Decision 2002 initiative, the city used a paper ballot to ask for residents’ input on whether to fund either of two sets of capital projects through an increase in the occupational tax.

“We were told that we couldn’t have a local referendum,” Payne said.

The Associated Press has reported that HB1 could run into problems with the Republican primary, because “most of the Republican candidates for governor have criticized the proposal as a tax increase.”

Joy Campbell, 691-7299, jcampbell@messenger-inquirer.com

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