Local-option sales tax sponsor doubts chances in Frankfort - WDRB 41 Louisville News

Local-option sales tax sponsor doubts chances in Frankfort

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Louisville Mayor Greg Fischer Louisville Mayor Greg Fischer

LOUISVILLE, Ky. (WDRB) -- Louisville Mayor Greg Fischer's local-option sales tax proposal took legislative form Tuesday, but even the bill's sponsor doubts its chances in the 2014 session of the General Assembly.

"I don't really anticipate it passing this year," said Sen. Paul Hornback, a Republican from Shelbyville, of the constitutional amendment he filed, SB 135.

Hornback said Wednesday he introduced the proposal to ignite debate on whether cities and counties should be able to levy their own sales taxes.

"A lot of times it can take more than one year" to win the broad support required for a constitutional amendment, he said.

Also on Wednesday, Fischer joined Metro Council President Jim King and Jeffersontown Mayor Bill Dieruf in announcing a proposed Community Investment Commission. The 18-member group would advise the Metro Council on which capital projects would be funded through the local sales tax.

The commission is meant foster community-wide agreement on projects that the proposed tax would fund. As WDRB reported in November, suburban cities like Jeffersontown and St. Matthews might be able to levy their own sales taxes under the plan, which would dilute the new revenue.

In a news release, Dieruf said the proposed Investment Commission is a fair way for cities like Jeffersontown to be represented in the choosing of the projects.

"With 82 cities and Metro Louisville all working together we can accomplish great things for all in our community," he said. 

The amendment Hornback filed Tuesday would allow the General Assembly to give any city or county the power to assess a local sales tax of up to 1 percent, subject to the approval of local voters. The new tax would be added to the statewide sales tax of 6 percent.

The local tax would be temporary and used only to finance a capital project or set of projects within the city or county.

First, the constitutional amendment must be approved by super-majorities (three-fifths) of the House and Senate. Then, it would go to voters in a statewide referendum.

If approved, the General Assembly would then be able to give cities and counties the power to levy the sales tax, but voters in those localities would have to approve the tax and the projects it would fund in another referendum.

"This is about giving Kentuckians the right to vote on investing in their hometowns, a right that citizens in 37 other states already have," Fischer said in a statement Wednesday. "This is direct American democracy at its finest and we thank Sen. Hornback for leading on this important initiative."

Even with proposed Community Investment Commission in Louisville, one issue that remains to be addressed is how cities and counties in the same area would resolve conflicts over the tax.

Hornback said the General Assembly needs to work out, for example, what would happen if Shelbyville, Simpsonville and Shelby County all wanted to levy a new 1 percent tax.

The constitutional amendment ensures that taxpayers would pay no more than an additional 1 percentage point in any county, but separate legislation is needed to spell out the details.

Hornback said all those issues should be hashed out before the constitutional amendment can be fairly considered in the General Assembly.

"The last thing I want is the city of Shelbyville and the city of Simpsonville fighting against Shelby County," Hornback said. "I want some organized way to decide who gets an opportunity to do what."

Hornback's bill would put the following question to voters in the statewide referendum:

"Are you in favor of giving local voters a new right to approve or reject the funding of specific local projects that would be paid for by a temporary local sales tax of no more than one percent, and that would expire when the projects are completed, as authorized by the General Assembly?"

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