Local-option sales tax top priority for House in 2015

12/19/2014 06:48 PM

House leadership says giving voters in local communities the power to vote on temporary tax increases to fund local projects will be their priority piece of legislation for the upcoming 2015 session.

House Speaker Greg Stumbo, D-Prestonsburg, House Majority Whip Tommy Thompson, D-Philpot, House Minority Leader Jeff Hoover, R-Jamestown, along with Louisville Mayor Greg Fischer, Lexington Mayor Jim Gray and Daviess County Judge-Executive Al Mattingly were on hand on Friday for the announcement.

The local-option sales-tax, known as LIFT, which stands for Local Investments for Transformation, will be the focus of House Bill 1 which would allow communities to vote on whether they would like to institute a temporary sales tax of a penny or less which would be used to fund specific projects.

Stumbo, who has not been in favor of local-option sales tax proposals in the past, says that a conversation with Governor Steve Beshear allowed him to see the benefits of the proposal.

“If the local communities get their dollars through this local effort, it will actually have a positive effect on the state’s budget,” Stumbo said. “So, instead of spending state dollars for these projects in local communities, they could potentially free up some state dollars we could spend in areas of education, health and human services and these types of things.”

Thompson feels that the proposal represents great public policy for Kentucky.

“When you have local control and local decision making, those are the fundamental aspects of government,” Thompson said. “What this bill would do is simply allow local government to be empowered to invest in the future.”

Hoover addressed concerns about the proposal being seen as a tax increase.

“I think that we all need to keep in mind that this is not a direct tax,” Hoover said. “This is giving residents and our citizens an option. That’s what this is.”

Louisville Mayor Greg Fischer says that the local-option sales tax gives communities an outlet to make projects become a reality instead of relying on state and federal money which may or may not come.

“Cities are not standing and waiting for Frankfort to come to the rescue,” Fischer said. “We want the tools at the local level to help grow our economies so we can create revenue that we need to invest in our communities.”

Currently, 37 states allow their communities to vote on whether they would like to institute a temporary sales tax to fund local projects.

If the proposed constitutional amendment is approved by the General Assembly in 2015, voters will have the opportunity to vote on it during the November 2016 election, since amendments can only appear on the ballot in even numbered years.

LIFT supporters have released statewide polls that show 60 percent of Kentuckians favor the local approach.

Senate President Robert Stivers, R-Manchester, responded to the press conference saying he was glad the measure will start in the House, but was hesitant to join on in on the proposal without a vetting.

“This is like a lot of bills that sound really good when someone pitches them in a press announcement and everyone who is for the bill gets to read a prepared statement. And you know, it may in fact turn out to great legislation,” Stivers said in a statement.

“But the reason there is a process is so there can be debate and discussion and all of the pros and cons can be discussed and aired and people on both sides of the issue can be heard. This is one of those bills that is going to have to play out and there is going to have to be a lot of discussion on whether it is the right thing to do.”


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