House passes proposed constitutional amendment on local-option sales tax

03/11/2016 08:23 PM

FRANKFORT — Legislation for a constitutional amendment allowing local governments to seek up to a penny sales tax increase for specific projects narrowly cleared the House of Representatives on Friday.

House Bill 2, sponsored by House Speaker Greg Stumbo, passed on a 60-31 vote, just reaching the three-fifths majority needed to move constitutional amendments in the legislature.

If it passes the General Assembly, voters will be asked to approve the amendment during this fall’s elections. 

The legislation would allow municipalities to request the sales tax increase for various projects, which must be approved by local voters. The constitutional amendment would require that projects and sunset dates be identified for any proposed sales tax increases.

The local-option sales tax has been sought by numerous local officials and groups in recent sessions, including Louisville Mayor Greg Fischer.

Stumbo, D-Prestonsburg, likened to local-option sales tax to educational reforms passed in 1990, which coincided with a one-cent sales tax increase for funding.

“I’m often asked, ‘How did you all survive, politically, that vote?’” Stumbo said in a floor speech. “Well, the truth of the matter is we had spent the entire year, you and I and everyone else that Gov. (Wallace) Wilkinson had appoint to our various committees, we had traveled the state of Kentucky, having town hall meetings and meetings in almost every community talking about the need for education equality and the necessary funding to bring our schools up to par.

“And so by the time we got around to enacting that legislation, the people of Kentucky were aware that it was going for a specific purpose, to improve the educational system in Kentucky.”

HB 2 received bipartisan support and opposition, with House Minority Floor Leader Jeff Hoover, R-Jamestown, among Republicans who backed the proposed constitutional amendment.

But some within the minority caucus cited concerns that rural residents who shop in nearby cities would pay higher sales taxes for projects for which they might not benefit.

Rep. Jim Wayne, D-Louisville, said he could not support the proposed amendment because higher sales taxes would disproportionally affect the poor.

“The poor people in my district spend every buck that they make to survive, to keep their bodies and their souls together,” Wayne said.

Supporters, however, said the local-option sales tax demonstrated true democracy, as voters would have a direct say in how they’re taxed and for what purpose.

“We want no taxation without representation, and this bill does it the very best way,” said Rep. Brad Montell, R-Shelbyville. “It takes it directly to the people.”

The House also approved the constitutional amendment’s enabling legislation, House Bill 374, on a 55-36 vote Friday.

Fischer urged the Senate to take up HB 2 after local-option-sales-tax bills haven’t gained traction there.

“Giving citizens the right to vote is a bedrock principle of American democracy — and today members of the House of Representatives gave Kentuckians a voice on investing in their communities through local option,” the Louisville mayor said in a statement.


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