Lawmakers working on gas tax fix while P3, local-option sales tax bills seem destined to fight another session

03/09/2015 11:39 PM

FRANKFORT — Bills on public-private partnerships and local-option sales taxes are in limbo and a proposal to shore up the state road fund may be in the works as this year’s legislative session nears the 10-day veto recess, officials said Monday.

Lawmakers have a busy two days ahead as they scramble to send bills to Gov. Steve Beshear’s desk before recessing until March 23. With talks on anti-heroin legislation continuing Monday, here’s how other high-profile proposals are faring with the 30-day session nearing an end:

House Bill 443 (public-private partnerships)

After clearing the House on an 84-13 vote Feb. 25, HB 443 seemed poised for a quick trip to the governor’s desk.

A similar public-private partnership, or P3, bill passed both chambers last year, but Beshear vetoed the proposal based on a floor amendment filed by Rep. Arnold Simpson that barred tolls in financing the Brent Spence Bridge project. Despite Simpson’s impassioned pleas, the House rejected the Covington Democrat’s tolling amendment.

But the provision that doomed last year’s P3 bill has ultimately stalled this year’s proposal, Senate President Robert Stivers told reporters Monday. Others share Simpson’s anti-tolling sentiment, he said.

“So at this point in time with the other issues and in somewhat of a shortened session due to weather, there doesn’t appear to be the desire to deal with P3s,” Stivers, R-Manchester, told reporters after the Senate adjourned.

Beshear, a P3 supporter, said there’s still time to sway senators, noting anything can happen until the legislature adjourns sine die. The governor offered a compromise in HB 443, granting the General Assembly authority to approve the funding plan for any public-private projects between Kentucky and Ohio.

Some are apparently still worried about the estimated $2.6 billion bridge plan in northern Kentucky, he said.

“Others are concerned that local governments aren’t involved in the legislation,” Beshear said after a news conference. “I’ve just heard several different kinds of rumors, and we’re trying to pin that down now and see if we can’t get some movement.”

House Bill 1 (local-option sales tax)

Beshear has also heard myriad rumblings on the Senate’s misgivings about HB 1, a constitutional amendment allowing local governments to propose projects funded a sales tax increase of up to 1 percent if approved by voters. The amendment would be voted on in 2016.

“I think there’s some feeling that someone is going to say that a senator voted for a tax if they vote for this amendment,” Beshear said. “Obviously that’s not accurate. All this vote would do is put the issue on the ballot and let everybody in the state vote on it.”

Stivers said HB 1, which the House approved on a 62-35 vote Feb. 12, “has a very limited likelihood” of reaching Beshear’s desk this session. The proposed amendment would need support from three-fifths of the Senate, or 23 senators, to pass.

Industrial power consumers faced potential multimillion tax increases under the bill, prompting talks of shielding them from the proposed local-option sales taxes, he said, and others quickly sought similar relief.

“The thoroughbred industry wanted a similar carve-out,” Stivers said. “Well that’s millions of dollars being cut out of the system and in ways that was what was being used to gain and garner support from local either county governments or municipalities.”

“It’s going to take, I think, a renewed effort by the proponents to educate a lot of people,” he continued, “and I don’t know if they’re going to be able to do enabling legislation because they started carving out so many things, or at least saying they would carve out several entities.”

Senate Bill 29 (gas tax)

SB 29 — which would raise the floor of the wholesale price of gasoline, on which the gas tax is set, to its level Jan. 31 — is the lone proposal to prevent a looming 5.1-cent-per-gallon drop in the gas tax, but it’s unclear what bill, if any, will ultimately cross the finish line.

That’s the first stumbling block: Stivers insists the House must act first on revenue bills while House Speaker Greg Stumbo argues a tax freeze can be handled by the Senate initially or the chamber could pass an amended House bill with the gas tax provisions.

House Democrats are also reluctant because Republicans made campaign fodder out of their vote last year on a bill setting the gas tax floor at 32.3 cents per gallon, 1.5 cent higher than its rate at the time.

Beshear called the politicization of last year’s vote “a complicating factor,” although he said talks are ongoing.

“There is some concern that we need to take some action to make sure that the Road Fund is still able to function with enough revenue to do the infrastructure work that we need to do,” he said.

How the process will play out is anyone’s guess at this point.

“Well, we’re waiting to see what the Senate’s going to do,” Stumbo said when asked about the gas tax.

Stivers said the two sides are discussing a way to prevent a multimillion-dollar hole in the Road Fund. A resolution could come in a conference committee or in a revenue bill passed by the House, he said.

“We’re trying to work through a process and procedure with the House as to a potential compromise,” Stivers said. “But a gas tax, if it an original bill, has to start in the House, and some people haven’t comprehended that.”

Pure Politics reporter Don Weber contributed to this report.

Kevin Wheatley

Kevin Wheatley is a reporter for Pure Politics. He joined cn|2 in September 2014 after five years at The State Journal in Frankfort, where he covered Kentucky government and politics. You can reach him at kevin.wheatley@charter.com or 502-792-1135 and follow him on Twitter at @KWheatley_cn2.

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