ISSUE: Local-option sales tax concept
OUR VIEW: Hard to disagree with right to decide
Everyday we each make decisions that influence our quality of life. Most of us do not like having others make choices for us, especially when those choices directly impact our lifestyles, our finances or our happiness. We tend to push back even harder when politicians are making decisions for us without little or no input.
For as long as most can remember, the political body in Frankfort has had control of the purse strings and exercised its financial clout and influence over counties and cities in Kentucky. The 6 percent sales tax, for example, is collected by the state and doled out by the General Assembly and administrative bodies in Frankfort.
When it comes to any quality-of-life, brick-and-mortar improvement in our communities that needs money, local residents end up sending someone to Frankfort to beg for financial support.
That process is not conducive to building progressive growth in a time frame necessary for local communities to remain competitive in the global economy of today.
It also opens our legislative body to make decisions based on perceived priorities that can be influenced by special interest groups. The end result often means a much needed project fails to gain support and funding because of a lack of lobbying effectiveness or legislative clout.
That’s why the concept of the local-option sales tax movement and its proposed constitutional amendment deserves support. Local residents would have full authority to levy an additional 1 percent sales tax or not.
Local projects would require a majority approval of residents to activate a self-imposed sales tax.
Who could argue a local-option sales tax decision reached by the majority of voters in a given community was a bad decision?
Yes, there are many unanswered “what if” questions associated to the proposed local-option sales tax. Those questions eventually will be resolved by enabling legislation. The concept of a locally voted, local sales tax is the first step.
Kentuckians should understand that this will be a long and detailed process. The proposed amendment is only the beginning.
The legislature must decide if voters will be allowed to consider constitutional change that will give control of the decision to fund projects to local voters. That seems like a viable idea.
As proposed, a local-option sales tax is a special-purpose tax implemented and levied at the city or county level. It could be restricted for use as a means of raising funds for designated local projects, such as improving area streets and roads, constructing a much-needed park or public facility or refurbishing a community’s downtown area.
It only impacts the community or county in which it has been activated and does not change the sales tax rate in neighboring areas or across the state.
As promoted by its advocates, the proposed sales tax would have stipulations such as no additional tax could be initiated until the project for which the tax was activated was complete and paid for. This means the tax would have a “sunset clause” so once the project had been completed and paid off, the community would return to its prior tax rate.
Kentuckians should have the right to choose our own community priorities. People making their own collective decision is an appealing process.
In Hardin County, the local-option sales tax would be a significant instrument in our toolbox to secure funding for projects the majority of voters consider to be important.
Under the local-option sales tax as proposed, up to an additional 1 percent tax could apply only to items taxed today. Food, medicine, utilities and automobiles would be exempt.
The concept calls for all revenue collected to be used for specific projects voted on and approved by local residents. The money raised would not be added to a local or state governments general budget.
Even more importantly, the tax has a ceiling of 1 percent in any county and it cannot be stacked. Hardin County could not have a 1 percent tax and then have Elizabethtown, Radcliff or any other community in the county stack another 1 percent tax on top of that.
The amendment, if it wins support of both chambers of the General Assembly, would have to be affirmed by voters. And when the local ideas for improvements are proposed, approving the tax again would require a community vote.
Currently, 37 states have local sales tax ability, and of those, 23 states have communities with local sales taxes funding specific projects.
Kentucky communities need the same opportunity if we are to keep up.
If the1 percent tax already was in place, Hardin County could have raised at least $6.1 million in 2012. That money could have been designated for variety of projects and helped lower the area’s jobless rate through the construction of those projects.
It is important to understand that the potential impact on our economy is substantial. At the same time, the equation for success is simplistic.
Local-option sales tax + local voter approval = new project funding = new jobs = improved quality of life. That adds up to a initiative that Kentuckians should conceptually support.
This editorial represents a consensus of The News-Enterprise editorial board.